EUR/USD off lows, back to 1.1050 awaiting for the ECB
|- Euro steady in a consolidation range versus US Dollar, above 1.1030, limited by 1.1060.
- Key events ahead: US PPI data on Wednesday and ECB meeting on Thursday.
The EUR/USD pair is practically flat for the day, trading near the 1.1050 area, around the same level it closed yesterday. It bottomed recently at 1.1029 and bounced back toward 1.1050.
As of writing trades at 1.1050, with a bullish intraday tone but still limited by a familiar range. The rebound from the lows is taking place amid a decline of the US Dollar across the board. The greenback is falling despite higher US yields. The 10-year climbed to 1.66%, the highest since August 14.
Volatility remains low and the Euro steady ahead of Thursday’s European Central Bank (ECB) meeting. A stimulus package is expected to be announced, including rate cuts. “Given the chance that the ECB fails to match market expectations for easing policy, the balance of risks favors higher EUR/USD and European FX outperformance on the day. But any spike in EUR/USD and EU FX should be temporary, as growth concerns will eventually kick in. A disappointing level of QE could also point to higher European rates and bond yields”, explained ING analysts.
Rangebound until Thursday?
Currently, the pair is moving within a range since last week, moving between the 1.1010/20 support level and limited by 1.1060, a horizontal level and also where the 20-day moving average currently stands. A consolidation on top of 1.1060 would likely push the Euro further to the upside. The next resistance might be seen at 1.1115 and 1.1155. On the flip side, before 1.1015, there is an intermediate support at 1.1030. The bearish pressure will rise sharply if EUR/USD falls below 1.10000.
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