EURUSD Hits Roadblock
It wasnt a big surprise that the dollar started the year on the backfoot as the trend had set in over the last 2 weeks of the year 2017. It had happened on pretty low volume and liquidity and the only challenge in front of the bulls was to see whether they would be able to carry on the momentum and ensure that the move did not reverse right away and so far, they seem to have managed to do that successfully.
The pair moved higher through the 1.2050 region but they seem to have hit a roadblock in the 1.2070 region so far and there has not been much progress beyond this region. This region is known to have a lot of selling and with the move higher being done on low volume over the last couple of weeks, this region of 1.2070 is likely to present the first biggest challenge for the bulls. With the range of news scheduled to be released, we are in for a wild ride.
Looking ahead to the rest of the day, we have the manufacturing PMI data from the US but the biggie would bethe FOMC meeting minutes from December. The market would be watching it closely to look for signs of 3 rate hikes this year and to see whether that plan is still on. If it is and if the minutes are hawkish, then we could see the dollar get some respite.