EUR/USD buyers and sellers are battling for near-term control around 1.1900

EUR/USD H1 02-09

The pair is trading around the 1.1900 handle for the past few hours as sellers are trying to push a little more for near-term control, after having driven price down upon hitting the 1.2000 level in trading yesterday.

That likely prompted some heavy profit-taking in the pair, and so far the pullback isn't really leading to a major squeeze/reversal just yet.

To have a better sense of that, the key near-term levels in the pair are the ones to keep an eye out for in the sessions ahead.

For now, price action is centering around the 100-hour MA (red line) @ 1.1901 and that will be a key level to watch in European morning trade today.

Keep above that and buyers still keep near-term control but break below and the near-term bias in the pair will turn to being more neutral instead.

Further support is then seen closer to the 200-hour MA (blue line) @ 1.1858.

In the bigger picture, the 1.2000 level will likely continue to offer stern resistance in the pair - especially considering stretched positioning i.e. long euro, short dollar.

But I would argue that dips into 1.1700 and 1.1800 will be bought into considering that the dollar's outlook remains bleak, while the euro area recovery is still intact.

That said, a key risk will be the ECB taking a firmer stance in keeping pace with the Fed, should inflation data continue to sink in the manner that we saw yesterday here.