The EURUSD pair made some good progress over the last week as the pair managed to bottom out at around the 1.0600 mark. We had expected the pair to do a lot of consolidation and ranging over the last week but what we saw was a lot of volatility that was caused by some major fundamental action in the US and also in the UK which is likely to affect the euro and its value.
Euro In For a Volatile Week
We had an announcement from the UK PM May where she announced that the UK would be good for a quick poll in June. This was seen as a plot from May to strengthen her position domestically and also to put herself in a strong position when she sits down for negotiations on the Brexit process with the Euro leaders. The pound skyrocketed as a result, and surprisingly, the euro seemed to follow it though this should have been a sign that would have weakened the euro. This pushed the EURUSD pair through the 1.0700 mark and make a strong push to break through the 1.0750 and for some time, it did look as though it had managed a clean break there.
But along came the news from the US that Trump and his team would be unveiling a new tax plan for corporates and the middle class and this could involve large tax cuts. This was enough to make the dollar bullish and this helped to push down the EURUSD through below 1.0750 and it made its way towards 1.0700 towards the end of the week.
Looking ahead to the coming week, we have the French elections underway currently. A loss for Le Pen could boost the EURUSD pair during the early part of the week while a win for her could let the bears run amuck. We also have the ECB press conference and rate announcement during the middle of the week and the Advance GDP from the US on Friday. We also hear reports that Trump could unveil his tax plan as early as next week but we truly believe that he would not go into details of anything and would probably throw in a few lines which would be enough for the media to much on, as their headlines. All of this points to a very volatile week.