EUR/USD hugs the 100-hour moving average and sits in a 18 pips range today

EUR/USD H1 21-08

Euro traders are largely putting Italian political risks aside as price action remains somewhat muted throughout the course of this week. Price has just been bouncing between support around 1.1070 with topside limited around 1.1100-10.

Currently, price action is hugging the 1.1100 handle but also just pivoting around the 100-hour MA (red line) since overnight trading.

This goes to show that buyers and sellers are both poised amid some indecision ahead of euro area PMI data releases tomorrow. That will be the key risk event for the single currency in trading this week - amid the ongoing political crisis in Italy.

If the PMI data continues to suggest a material deterioration in economic conditions, expect that to weigh on the euro as markets will translate that to an urgent need for the ECB to introduce heavy stimulus in September.

For a look at the expectations of the data, you can check out my earlier post here.