EUR/USD still ranging, weighed by politics

EUR/USD testing the 50-hourly SMA.
EUR/USD driven on politics.

Ross J Burland FXStreet

EUR/USD has been confined to a narrow range on Tuesday in the absence of any key data and politics remain the theme of markets as we progress through the week. Currently, EUR/USD is trading at 1.1742, up 0.11% on the day, having posted a daily high at 1.1758 and low at 1.1713.

Analysts at UOB Group acknowledged that the pro-business Free Democrats (FDP) unexpectedly pulled out of more than four weeks of negotiations with German Chancellor Angela Merkel’s conservative bloc and the ecologist Greens, citing irreconcilable differences.

"An agreement remains possible and we do not think this situation currently reflects anything more than a short-term distraction for the EUR. Look for range-trading to continue for now," the analysts at Scotiabank added.

Meanwhile, ECB's Draghi said that there is no risk for central banks from digital currencies currently, but they are a development that should receive interest from central banks and supervisor. Other Central Bank news came from Fed chair Yellen who announces that she will also leave the board of governors seat when successor Powell is sworn in. Elsewhere, the US President Trump declared that the North Korea state was a sponsor of terrorism and triggered sanctions keeping the risk-off theme alive.

EUR/USD levels

"EURUSD price action has the makings of a broadly more constructive trend developing (positive weekly price signals, sustained break out from the bullish consolidation on the daily chart) but there is a clear lack of momentum in the market at the moment that leaves the short-term trend looking rather flat. We look for support between 1.1675/00 near-term. Resistance is 1.1790," explained analysts at Scotiabank.

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

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