The EUR/USD pair has been consolidating and ranging since this morning as the dollar strength waxed and waned so what looks like an eternity. The ranging would be a killing feature of this pair as far as the long term traders and investors are concerned as the market is yet to make up its mind on which direction it wants the euro and the dollar to go. Both the currencies have been dealing with their own set of issues and this is the reason for all the uncertainty around this pair which is keeping the pair within a tight range.
EUR/USD to Consolidate
On the side of the euro, we have the escalating issues surrounding Greece and its bailout and just when you thought that it was done and sorted, it has reared its head again in recent weeks. We also have the elections for 3 countries in the eurozone scheduled for this year, and that includes Germany and France.
While France has a Trump like contender in Le Pen, who has been making all the waves but is behind on the opinion polls, Germany is also likely to see a strong challenger to Merkel in the coming elections. Both these countries are very strong backers of the euro and any major geopolitical changes in these countries could throw the euro out of gear.
On the other hand, the US grapples with its own issues surrounding Trump and his policy changes and also with the Fed and its rate hikes and this has been causing a lot of uncertainty which has been keeping the dollar under severe pressure. Hence both the currencies are in the grip of uncertainty and fears and this is the reason for the consolidation phase in EUR/USD.
Looking ahead to the rest of the day, we do not have any major news from the Eurozone while we have the core durable orders data from the US. Considering that we are nearing the month end, we should be in for some volatility in EUR/USD due to month end flows.