The day was a choppy one as far as trading was concerned as the dollar struggled to maintain the momentum which it had generated since the beginning of the week. The euro bulls also tried to make a stand but the underlying bearish trend in the pair was there for everyone to see. The standoff continues in the US Senate and it appears as though the US might be in for another economic shutdown, barely weeks after the first one.
It is this kind of developments that seem to be holding back the dollar from engaging in a fast and furious bull run over the last week or so. The economic data from the US continues to be strong and the prospects of further rate hikes seem to be quite bright with many of the Fed members also in sync as to when the rate hikes need to happen but the dollar bulls have been clearly affected by the geopolitical developments which add to the uncertainty in the markets.
Looking ahead to the rest of the day, we do not have any major economic data from either the US or the Eurozone and hence we can safely expect some more consolidation in the pair with the dollar on the backfoot due to the issues over the economic shutdown. If they manage to avert it at the last moment, then we should see the dollar continue its rebound.