EUR/USD sits a little higher but in a narrow range for the day
The pullback from Friday came after the release of the US Q1 GDP report which showed some murky details about the US economy but even so, it’s hard to really build a solid argument of a major reversal at this stage. The dollar remains the best of a bad bunch and until there is more reasoning for traders to turn elsewhere, the greenback should hold its ground as we begin the new week.
For EUR/USD, the near-term bias continues to favour sellers as price holds below both key hourly moving averages and that is telling about where price will still be headed for the time being. The only way I see things turning around for the pair if there is more worries about the health of the US economy and price starts tracking towards the 200-hour MA (blue line) @ 1.1217, threatening to break that level.
Otherwise, I reckon buying the dollar on dips would still be the preferred trade in the near-term and the less risky trade as the pullback last week didn’t break any major levels yet.
The next key risk event today will be US PCE data but we already had a glimpse of that from Friday’s report so I’m not sure if the release here will tell us anything new really. In any case, watch out for the near-term levels above for any further trade conviction.
Notable offers lie closer to 1.1200 while downside support is seen closer to 1.1125-30 followed by bids around 1.1100-10.