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EUR/USD sticks to lows near 1.2920

FXStreet (Edinburgh) - The demand for the shared currency remains subdued at the beginning of the week, taking EUR/USD to the lower band of the range around 1.2920/15.

EUR/USD surrenders gains

After hitting recent highs in the 1.2980 neighbourhood, spot sparked a correction lower to the current 1.2920 region and closer to last Friday’s troughs around 1.2910. Data wise in the euro bloc, the next release of note will be tomorrow’s ZEW Survey in Germany and the EMU, ahead the critical FOMC gathering due on Wednesday. A EUR rebound seems to have more chances now, after the last CFTC report showed that spec short positions eased a tad in the last week; however, the extent of the bounce would be pretty limited as the bearish outlook remains entrenched. “The stronger than expected underlying EUR strength suggests further up-move is likely. Expect any pull-back to hold above last Friday’s low at 1.2910 but a break above 1.3000 appears unlikely for now”, observed Quek Ser Leang, Market Strategist at UOB Group.

EUR/USD levels to watch

At the moment the pair is losing 0.34% at 1.2919 with the immediate support at 1.2859 (low Sep.9) followed by 1.2788 (61.8% of 1.2042-1.3995) and finally 1.2755 (low Jul.9 2013). On the upside, a break above 1.2963 (200-h MA) would target 1.2980 (high Sep.15) en route to 1.2990 (high Sep.5).

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