Large expiries and offers is keeping a lid on price action for the day
The pair managed to move higher today as buyers establish a more bullish near-term bias following a break above the key hourly moving averages earlier. However, despite the upside move, the 1.1400 handle remains a key impediment at this point in time.
The figure handle not only acts as a key resistance level for the pair as evident in prior trading sessions but today there are large expiries sitting there that is helping to attract price to the level but keeping it around there as well.
On the balance of things, the euro appears to be rather immune to Italy's budget deadlock with the European Commission. However, I reckon any positive spin on the headlines there will no doubt give the single currency a much needed push higher. As it stands, EUR/USD remains rather confined in a trading range between 1.1300-1.1450 over the past seven trading days. Buyers and sellers are just waiting on some form of headlines to build further conviction for an extension at this point.
Although buyers appear to be in near-term control now, a break to the upside still appears daunting with key resistance levels lying around 1.1410-20 and 1.1434-43. Beyond that, the 20 November high @ 1.1472 will be a key level to watch out for as well. Unless markets begin to really price out a rate hike by the Fed next week, I can't imagine the pair breaking higher without any further headlines to support such a move.
As for downside levels, sellers will first have to aim towards breaking back below the key hourly moving averages before attempting a break of the 1.1300 handle. A break back below that will be key to extending the downside momentum. But with the dollar having its own problems such as yield curve inversion worries, I reckon it's going to need support from the Fed if anything to make a clean break to the downside.
