It wasn’t so long ago that everyone was talking about EURUSD parity and the pair was on a one-way trip to the bottom. But with the reversal of the Trump trade, the euro suddenly found a bid and is up more than 200 points since the lows of the week.

While the pair certainly appears to have carved out a solid bottom at the 1.0350-1.0400 level it will have a hard time clearing the 1.0700 barrier in the near future. The majority of Fed officials remain resolutely hawkish and that suggests that rates and yields should remain supportive keeping a lid on any euro rally.

To that end, tomorrow’s US Retail Sales numbers which is the only US economic report of any consequence this week, will loom large in market’s eyes. The recovery of the US consumer has been choppy at best and traders will want to see strong gains in December given the rise in confidence and wages. An upside surprise tomorrow could stop the dollar selloff at around these levels, allowing the downtrend in EURUSD to resume.