EUR/USD highs currently capped by 38.2 retracement level

While the focus of the currencies market has been on the flash crash, EUR/USD continues to do its own thing by ranging between the 1.13 and 1.15 handle still. The price action from the highs yesterday and the lows today exemplifies that trading range that has persisted since mid-November.

The rebound from the lows today sees price now run into resistance from the 38.2 retracement level @ 1.1381. That is so far limiting further upside in the pair. Of note, there is a decent amount of expiries at 1.1400 as well so watch out for that to put a cap on price action too.

But the two key levels in the near-term chart that buyers must break above for a chance at a real extension are the key hourly moving averages at 1.1413 and 1.1430. By shifting the bias back towards being more bullish, only then will we see a potential retest of the 1.1500 handle.

There is still decent arguments to be made on both sides of the trade in EUR/USD now with the Fed to take a more dovish stance while US-China trade worries appear to be hitting home rather hard (Apple latest to take a hit, signaling that no US companies may be spared from the dispute).

Meanwhile, Eurozone growth isn't faring any better and further slowdown will only push back the ECB's guidance and cause further woes for the euro.

Until traders can sort out which of the two is worse to deal with moving forward, the 1.1300 to 1.1500 range is likely to persist still. The next big move in the pair will rely on one that firmly breaks away from the trading range.