EUR/USD: Sellers in control to start the week as focus turns towards the ECB
EUR/USD continues to hold within "range" over the past two weeks
For the most part over the last two weeks of trading, the pair has been bouncing around 1.1200 and 1.1280 with price now hovering around 1.1210-20 to start the week. Sellers remain in near-term control as price holds below both key hourly moving averages and also below the 100-day moving average @ 1.1248.
As we navigate through price action this week, keep in mind that everything will tie back to expectations ahead of the ECB meeting decision on 25 July.
To a larger extent, markets are expecting the central bank to tweak their forward guidance to reaffirm stimulus/easing in September but there is a slim chance for the central bank to even act as soon as this week.
On Wednesday, we'll have key data from the euro area as we'll get July preliminary PMI survey data for France, Germany and the overall Eurozone. I would expect that to factor into expectations on how soon the ECB will act (this week or in September).
As for EUR/USD, with the focus being on the ECB coming up first, the euro is likely to stay weak in the mean time as traders are also starting to lean more towards only a 25 bps rate cut by the Fed after the flip flop last week.
There will be no Fedspeak this week due to the blackout period before the FOMC meeting, so expect markets to stay more calm over the next two days ranging in between levels highlighted above. I would reckon price action in EUR/USD will sit between 1.1200-50 for the most part as we wait on euro area data before the ECB.
As for the trade after, it is very much to go with the break seen on the chart on either side of the range over the past two weeks.