EUR/USD remains confined in a range, flat-lined around mid-1.1700s

EUR/USD witnessed a subdued/range-bound price action on the first day of a new week.
Concerns about the third wave of COVID-19 infections weighed on the common currency.
The upbeat market mood undermined the safe-haven USD and helped limit the downside.

Haresh Menghani FXStreet

The EUR/USD pair seesawed between tepid gains/minor losses through the mid-European session and remained confined in a narrow trading band around mid-1.1700s.

A combination of diverging forces failed to provide any meaningful impetus to the major and led to a subdued/range-bound price action through the first half of the trading action on Monday. Worries about the economic fallout from the third wave of COVID-19 infections in Europe kept the euro bulls on the defensive and capped the upside for the EUR/USD pair.

Investors remain concerned that pandemic-related restrictions in Europe could derail the fragile economic recovery amid the slow pace of vaccinations. In the latest sign of the region’s struggles to keep the coronavirus pandemic in check, France announced late on Wednesday it would widen lockdown measures to the entire country starting Saturday.

However, a softer tone surrounding the US dollar extended some support to the EUR/USD pair and helped limit any deeper losses amid relatively thin liquidity conditions. As investors looked past Friday's blockbuster US monthly jobs report (NFP), the upbeat market mood was seen as a key factor that undermined demand for the safe-haven greenback.

That said, the optimistic outlook for the US economy and a modest pickup in the US Treasury bond yields should continue to attract some USD dip-buying. This, in turn, suggests that the path of least resistance for the EUR/USD pair remains on the downside and any attempted recovery move might still be seen as an opportunity for bearish traders.

The impressive pace of coronavirus vaccinations and the Biden administration's planned stimulus of more than $2 trillion has raised expectations for a relatively faster US recovery from the pandemic. This, along with speculations for an uptick in US inflation, pushed the yield on the benchmark 10-year US government bond back above the 1.70% threshold.

Market participants now look forward to the US ISM Services PMI for a fresh impetus for reaffirmation of a solid US economic rebound from the coronavirus shock. The key focus, however, will be on FOMC meeting minutes and a scheduled speech by Fed Chair Jerome Powell on Wednesday and Thursday, respectively, which influence the near-term USD price dynamics.

Technical levels to watch

EUR/USD

Overview
Today last price	1.1757
Today Daily Change	-0.0006
Today Daily Change %	-0.05
Today daily open	1.1763

Trends
Daily SMA20	1.1858
Daily SMA50	1.1996
Daily SMA100	1.2055
Daily SMA200	1.1881

Levels
Previous Daily High	1.1786
Previous Daily Low	1.1749
Previous Weekly High	1.1794
Previous Weekly Low	1.1704
Previous Monthly High	1.2113
Previous Monthly Low	1.1704
Daily Fibonacci 38.2%	1.1763
Daily Fibonacci 61.8%	1.1772
Daily Pivot Point S1	1.1746
Daily Pivot Point S2	1.1729
Daily Pivot Point S3	1.1709
Daily Pivot Point R1	1.1783
Daily Pivot Point R2	1.1803
Daily Pivot Point R3	1.1821

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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