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Forex: EUR/USD still range bound after very busy week of data

FXstreet.com (Barcelona) - The EUR/USD finished the day up 55 pips at 1.3116. After suffering steep losses the previous day after the ECB Monetary Policy press conference, the pair able to claw back some losses after a few ECB members downplayed the idea of negative interest rates on deposits. We will see Retail Sales released in the upcoming European Session at 9:00GMT. Furthermore, ECB President Mario Draghi will be speaking at 13:00GMT.

According to Mansoor Mohi-uddin, Head of Foreign Exchange Strategy at UBS, “The upside risks to the euro now appear more limited. Investors will worry that the ECB will use the risk of negative interest rates as a form of verbal intervention to cap the single currency. Already this year Draghi has capped the euro at 1.37 against the greenback in February by saying the exchange rate was an input into monetary policy decisions. This month's comments again appear to have capped the single currency at 1.32. On Friday ECB Governing Council member Nowotny said a negative deposit rate was 'not relevant in the immediate future'. But fellow member Liikanen said the ECB would now assess the consquences of cutting the rate below zero.”

From a technical perspective, the frustration of a range bound market continues even after a week which saw some major economic releases from around the globe. For now, the upper (1.3240) and lower (1.2950) will be the important levels to monitor. The short term moving averages remain in neutral set up, and so does the RSI (14). Until the pair can build value above or below the trading range levels, choppy price action is likely to continue.

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