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EUR/USD stays sidelined around 1.1400, low volatility persists

  • The pair keeps the rangebound trade around the 1.1400 mark.
  • The greenback is following suit, keeps the trade just above 96.00.
  • EMU’s Current Account next on tap, US Industrial Production comes later.

Marginal volatility in the global markets is keeping EUR/USD within a tight trade range around the key 1.14000 handle so far in the second half of the week.

EUR/USD looks to risk trends, data

Spot appears to have stabilized in the 1.1400 neighbourhood so far today, always on the back of decreasing volatility and the absence of significant catalysts in the global markets.

In addition, the current rangebound finds support in the 1.1380 region, where sits the key 55-day SMA, while gains appear limited just beyond 1.1400 the figure for the time being.

Data wise in the region, November Current Account figures are due later, while Industrial Production and the preliminary print of the U-Mich index will grab all the attention in the NA session.

What to look for around EUR/USD

Prospects of gains around EUR have been undermined by the dovish message from ECB’s Draghi earlier in the week along with some pick up in the demand for the buck. In the meantime, investors should remain focused on the ongoing slowdown in the bloc as well as upcoming issues such as the EU Parliamentary elections in May (populism could gain further presence), social unease in France (the ‘yellow-vest’ issue remains largely unresolved), omnipresence political effervescence in Italy and the likeliness that a technical recession in Germany in H2 2018.

EUR/USD levels to watch

At the moment, the pair is gaining 0.04% at 1.1393 and a breakout of 1.1422 (21-day SMA) would target 1.1442 (38.2% Fibo of the September-November drop) and finally 1.1465 (100-day SMA). On the downside, immediate contention arises at 1.1382 (55-day SMA) seconded by 1.1378 (low Jan.16) and finally 1.1356 (23.6% Fibo of the September-November drop).

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