The tight range speaks to the lack of appetite among most dollar pairs so far today. The only exception once again is really USD/JPY, with the pair up 0.5% to 154.70 but off earlier highs as the 155.00 mark holds. As an aside, there are large expiries there in play so do be wary of that. Going back to EUR/USD, there's little to work with despite the flurry of data in European morning trade.
The Q2 GDP data across the euro area reaffirms more resilience in the last quarter. But there are already early signs that the economy is beginning to stutter again as we get into Q3. Meanwhile, the Spanish and German state CPI readings aren't really offering anything new to the picture thus far.
The disinflation process is still taking hold but at a very gradual pace. In fact, the bumps along the way are still very much persisting. In Germany, it looks like headline annual inflation might tick a little higher in July. But we'll see on the core reading later, as that will be the bigger focus.
So far, the odds of an ECB rate cut in September are at ~65% and that is little changed from the ~68% before the session began. The ECB would definitely like more progress on inflation developments but they're being made to wait. It looks like the August reading will be the more crucial one in determining whether the platform is right to act in September.
As such, that's not leaving the euro with much to act upon today. EUR/USD is still holding just above its 200-day moving average (blue line) at 1.0821 with the 100-day moving average (red line) not too far away at 1.0795. That alongside bids layered at 1.0800 and the 50.0 Fib retracement level of the swing higher in July at 1.0807 will act as a key supportive region for the pair now.
But a firm break below that could set off more protracted losses for EUR/USD. If so, sellers will at least be looking to aim towards the June lows near 1.0666-70.
Do be mindful that the dollar side of the equation is also one to watch this week. That considering we have the Fed and the US jobs report coming up. Besides that, the overall risk mood is also an important factor as well amid key earnings releases for equities.
