The euro was confined in a relatively tight trading range against the U.S. dollar over the past week. It tested but failed to break above 1.08 and sank as low as 1.0607. There were no major Eurozone economic reports on the calendar but the ones that we saw including Germany’s industrial production, trade and current account balances were worse than expected, a sign that the benefits of a weaker euro were fading. ECB President Draghi also spoke but he spent a large part of his speech firing back at Trump and his accusations that the euro was being manipulated. However he did mention that the Eurozone economy wasn’t strong enough for the central bank to reduce stimulus even though there have been recent signs up improvement and pick up in inflation. We expect EUR/USD to remain under pressure in the coming week and for 1.08 to hold as resistance. Eurozone and German fourth quarter GDP numbers are scheduled for release along with Eurozone trade and current account numbers as well as the German ZEW survey and consumer price reports.
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