Dollar posts a modest advance to start the session
EUR/USD is slipping lower to start the day, down by over 0.4% to a low of 1.2213 as the greenback holds firmer in European morning trade.
The drop comes as sellers keep a more bearish near-term bias upon defending the 200-hour moving average (blue line) earlier in the day. The drop now moves closer towards some support from the low at the end of last week near 1.2215.
Elsewhere, the dollar has also pared losses against the likes of the aussie and kiwi with AUD/USD easing to 0.7753. The 100-hour moving average in the pair remains a key near-term focus and that rests at 0.7747 currently.
Looking at EUR/USD in the big picture, I would argue that the pair is going to be in for a more choppy period between 1.2000 and 1.2500 for the most part this year.
While dollar weakness presents a case to stay long for the most part, the narrow range does leave a lot to be desired especially with the short dollar trade being more of a consensus positioning more than anything else.
That arguably leaves EUR/USD to potentially stronger pullbacks from time to time but I would say one can expect dip buyers closer to 1.2000 and 1.2100 - less so based on euro prospects, but more so based on the dollar depreciation narrative.
