After quite turbulent events in the recent weeks due to expectations for the new US Tax Code, meetings of the world's largest central banks, and the new pre-holiday Christmas week in the foreign exchange market would likely be calm.
This behavior of the market can be explained by the fact that a significant number of investors leave for long vacations in line with Christmas and New Year holidays. But this does not mean further that short-term speculators will doze and not try to push the market in their own interests, although they are unlikely to conduct significant changes on anything. A good reason for this could be the US GDP data to be released this week, as well as, the long-awaited final draft of the US tax code. With this, the market could possibly heat using these information guides, but this is unlikely to lead any significant changes in the foreign exchange market. Most likely, local movements, in particular, will enter the established price ranges.
On Monday, the consumer inflation data in the euro area was published. The data did not have any impact on the rate of the single European currency, while investors simply ignored them. According to the presented data, the consumer price index was expected to remain at the previous level of 1.5%, and added only 0.1% in November, which further coincided with the forecasts as well as to the previous October value.
On the same day, market players reacted based on the published data from the euro area or any other considerations. They "rocked" the market in the traditional New Year's manner, showing a one-day growth, another day decline. After completed the week within the positive territory, the US dollar paired with major currencies decreased on Monday and if it increased on Friday, then it is possible to spot a reverse picture for today, which is associated with the local appreciation of the dollar unless something happens out of the blue.
Forecast of the day:
The EUR/USD pair could possibly remain in the side range during the holidays on Christmas eve and the publication of the final draft of the US tax code It is considered necessary to sell the pair on the growth from 1.1840 with a probable target of 1.1715.
The GBP / USD pair also seems to stay in the range today in the wake of the news waiting for Brexit talks. If the final agreement is reached, the pair can receive local support. K 1.3430. If this does not happen, the price may fall to 1.3300.
* The presented market analysis is informative and does not constitute a guide to the transaction.
