The medium to long-term bias for the EURUSD is titled to the upside as long as the market’s reflation narrative remains alive and as long as the FED out-doves the ECB. However, there is a couple of reasons that might see some short-term weakness for the pair.
This Week’s Economic Calendar
The GBP has gone from hero to zero in a very short space of time as the UK government revealed a very contentious Internal Market Bill this week. The bill plans to override parts of the Withdrawal Agreement that relates to Northern Ireland and state aid. With the bill up for debate and the BOE on schedule all eyes will be on the GBP.
Just when you think the EURUSD is a runaway train, things took a minor detour with this past week’s events. It was a perfect downside cocktail with better US econ data, record net long positioning, a touch of deflation and a pinch of currency jawboning. The question now is will the downside continue?
Yes this week is NFP, and yes NFP hasn’t been the same focus point it was before the pandemic. However, this week’s Jackson Hole Symposium saw the FED take a fundamental shift in the way they look at inflation and employment, and means jobs data will become even more important than usual.