FXstreet.com (San Francisco) - After containing at 1.3275 the Euro's setback from 1.3365, the EUR/USD has recovered the 1.3300 level during the American afternoon as the pair is wrapping up the day almost unchanged from Monday’s close at 1.3320.

The pair has traded in a wide range within 1.3265/1.3370 most of the day, but keeps returning to the gravity zone around 1.3300/10 in every rejection. It looks like bulls don't need to worry about declines as far as the pair holds the 1.3300.

FXstreet.com analyst Richard Lee thinks that the EUR/USD is keeping bullish tone on 1.3305 support. "However, the single currency remains widely in a range, trapped between resistance at 1.3400 and support via the 1.3250 figure," Lee says. "A break above or below, respectively, is required before any directional bias can be established."

As for the short term, the next support at 1.3267 (low Jan.22) followed by 1.3257 (low Jan.160 and then 1.3248 (low Jan.11). On the upside, a break above 1.3372 (high Jan.22) would open the door to 1.3398 (high Jan.18) and finally 1.3404 (high 2013, Jan.14).

Corporate earnings fuel sentiment

Wall Street rose for a third-straight session on Tuesday. The Dow Jones and the S&P 500 hit fresh 5-year highs on the back of better than expected corporate earnings. All three mayors indexes have closed the day with gains.

Earlier in the morning, a stronger than expected German ZEW survey lifted sentiment, but a weak housing and manufacturing US data pressured maket. Today’s ZEW report now places emphasis on the IFO sentiment survey scheduled for later this week. "The report is additionally expected to show an increase in consumer optimism, which would be the third consecutive monthly gain," points Richard Lee.

Moving forward to Wednesday, a very light euro zone docket will kick in with a measure of the French Business Climate followed by Italian Trade Balance figures, all preceding the preliminary Consumer Confidence in the euro zone.

The Bank of England's minutes will take the attention, as well as the December Claimant Count Change and the ILO unemployment in the island. In the American side, the Canadian Interest rate decision and the housing price index will provide the market with a point of salt.

Euro under pressure, but still above 1.3300

The euro had a volatile day, falling to a low of on the back of a series of rumors ranging from a resignation at the Bundsbank, to a large German bank being asked to simulate a split, but bounced back to daily highs at the 1.3370 zone after a strong German ZEW survey reading.

However with movements driven by headlines, EUR/USD lacks definition and strength either side of the board, and continues to consolidate within its 1.3250/1.3400 range, where it has been trading during the last couple of weeks.

Marc Chandler, Global Head of Currency Strategy at Brown Brothers Harriman notes that the relationship between the Euro, volatility and the S&P 500 is far from stable and he feels like this combination of the firmer Euro volatility, if sustained, would seem to herald the normalization of market conditions.

Chandler considers that the implied 3-month Euro volatility has increased from the 5-year lows seen in the middle of last November near 6.4% to move above 9.0% at the end of last week. It has eased a bit, which is understandable give the 32 tick range yesterday, while the US was on holiday, and that the Euro is within the range set last Tues-Wed between $1.3257 and $1.3394. The 100-day moving average of 3-month Euro vol is just below 7.9%. A move back below there would suggest the recent increase is not the beginning of a new trend.