EUR/USD sits in a narrow range as markets experience a quiet start to the week
The pair is holding just above the 1.1300 handle as the euro is standing its ground against the dollar as we begin the new week. However, the trading range remains relatively narrow – 26 pips – as markets stay quiet in trading so far.
The near-term bias in the pair remains more bullish as price holds above the key hourly moving averages but buyers are unable to find a break above the 1.1325-30 swing region resistance for the time being.
So, what’s next for the pair?
However, in the bigger picture, it’s still hard to see the euro pull off a sustained rally given economic conditions and a softer outlook. With that regard, Thursday will be a key focus given that we’ll have the next set of PMI releases to come from the Eurozone (there’s also US retail sales data on the same day).
For now, I reckon the trade is to go with a topside break in the short-term as the short squeeze continues to run. But be wary that there are significant resistance levels around 1.1325-30, 1.1350 (100-day moving average), and then offers around 1.1390-00.
However, the safer bet would be to fade the rallies based on the fundamental aspects concerning the Eurozone economy for now. In that sense though, I’d prefer to chase such a trade when price starts to contend with the key hourly moving averages. Otherwise, it’s hard to really plan trades by gauging the extent of the short squeeze in positioning currently.