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EUR/USD remains range-bound as the key economic policy makers with Eurozone voice different opinions on the apt economic approach post-pandemic. On Monday, ECB’s member Fabio Panetta stated that the central bank should maintain borrowing costs at a low as a way to push up inflation to its target.
On the other hand, members Robert Holzmann and Jens Weidmann have cited the temporary nature of the bank’s emergency power. As such, they hold the opinion that those powers need to come to an end as soon as the emergency subsides. At the same time, ECB’s Vice President Luis de Guindos has noted that the region’s economic outlook is brightening. However, he was quick to add that the central bank is keen on the pulpable risk of higher inflation.
In today’s session, EUR/USD will be reacting to the Eurozone’s business climate and consumer confidence data. the US CB consumer confidence numbers will also define the pair’s price movements.
EUR/USD had been trading within a tight range of between 1.1910 and 1.1958 for a week now. At the time of writing, the currency pair was down by 0.1% at 1.1912. On a two-hour chart, it is trading slightly below the five and ten-week exponential moving averages. Based on the technical and fundamental indicators, the outlook is rather neutral. However, I have a bearish bias.
I expect EUR/USD to have its gains curbed, even as it tries to breakout of the horizontal channel. Indeed, it is likely to remain within the current range with the bears maintaining control over the market. A move below the channel’s lower border will place the support level at 1.1880. On the flip side, the bulls may manage to push the price to the psychological level of 1.2000 before pulling back.
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