The EUR/USD currency pair has been on a bullish trend for the past few weeks, and this trend is expected to continue in the coming week. The main reason for this bullish trend is the disappointing economic data coming out of the United States.
The US economy has been struggling to recover from the impact of the COVID-19 pandemic, and this has been reflected in the economic data. The latest data shows that the US economy grew at an annualized rate of just 6.5% in the second quarter of 2021, which was below expectations. In addition, the number of new jobless claims rose unexpectedly last week, indicating that the labor market is still struggling.
On the other hand, the European economy has been performing better than expected. The latest data shows that the Eurozone economy grew at an annualized rate of 13.7% in the second quarter of 2021, which was above expectations. In addition, the European Central Bank (ECB) has signaled that it will maintain its accommodative monetary policy stance for the foreseeable future, which is supportive of economic growth.
All of these factors are contributing to a bullish trend for the EUR/USD currency pair. Traders are likely to continue buying the euro and selling the US dollar in the coming week, as they anticipate further disappointing economic data from the United States.
However, it is important to note that there are risks to this bullish outlook. One risk is that the COVID-19 pandemic could worsen in Europe, leading to renewed lockdowns and economic disruption. Another risk is that the ECB could change its monetary policy stance, which could lead to a reversal in the bullish trend.
Overall, traders should keep a close eye on economic data from both the United States and Europe in the coming week, as this will be a key driver of the EUR/USD currency pair. If economic data from the United States continues to disappoint, we can expect the bullish trend to continue. However, if there are any positive surprises from the United States or negative surprises from Europe, we could see a reversal in the trend.
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- Source: Plato Data Intelligence.
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