- Euro ends Monday bumping against the day's high.
- EU GDP data coming down the pipe on Thursday.
EUR/USD finished Monday trading on a bid, trading into the day's high and testing 1.2290 at the New York close.
The Euro has started the week putting the brakes on its slide last week against the US Dollar as recent risk aversion has taken the top off risk assets.
The European Central Bank (ECB) is still cautious about inflation, with the ECB's own Ewald Nowotny noting recently that inflation has plenty of room to move higher, which leaves the ECB cautious to begin tapering their asset purchasing programs too soon. However, Nowotny still went on to state that if economic growth continues on its present course, it's very likely that the ECB will be seeing normalization of monetary policy beginning as soon as September.
Despite the risk of further shocks to equities markets in the face of rising interest rates, Nowotny reinforced that the ECB's job is to manage policy, not satisfy markets, and that pullbacks in markets are to be expected.
Nowotny's words will be put to the test when the Eurozone posts GDP figures on Wednesday at 10:00 GMT. Industrial production for the Eurozone and CPI data for Germany also drop around the same time, but markets' attention can be expected to largely focus on GDP for the entire EU.
The pair has intraday swing support/resistance forming at 1.2240 and 1.2295 respectively, while itnraday traders can also expect to contend with resistance pushing down from 1.2335 if buyers manage to continue to wrestle control from the bears. EUR/USD still remains exceptionally bullish on long-term charts, with Daily candles recently pricing in a possible rejection of support from the 34 EMA, currently resting at 1.2215.
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