The EURUSD is trading up and down today in a relatively narrow trading range. The low to high trading range is only 37 pips. That is well below the 97 pip average over the last 22 trading days.
Technically, recall from yesterday the 200 hour moving average stalled the fall after the index peaked during Monday's Memorial Day holiday trading day, and started its fall back down. The pair yesterday fell below its 100 hour moving average (blue line in the chart above), but once the 200 hour moving average was reached at 1.0678, sellers turned buyers push the price back higher. The price did closed just above its 100 hour moving average.
In the Asian session, the price fell back below the 100 hour moving average toward a swing area between 1.0696 and 1.0706 (see red numbered circles). That old led to a modest bounce back toward the 100 hour moving average at 1.07347. The price did trade briefly above the 100 hour moving average but could not sustain upside momentum.
In early New York trading, the rise in yields in stocks have helped to push the price back toward the rising 200 hour moving average which currently comes in at 1.06966.
With the price confined by the moving averages, the trading bias is neutral. Traders are looking for the next shove.
On the topside, a move higher will look toward the 1.0748 to 1.0760 area. Followed by the high from Mondays trade at 1.07857. On the downside, a break below the 200 hour moving average would target the low from yesterday at 1.067887. Below that level and there is a key support swing area between 1.0633 and 1.0641. Move below that level and the 30.2% retracement of the move up from the May low comes in at 1.06187
Fundamentally, the EU PMI data came in weaker than the prior month, but was higher than the preliminary PMI data. Yesterday the CPI in the EU rose to 8.1% vs. 7.5% the prior month. That was the highest level on record. ECB's Holzman and Kasimir, both indicated that they are open to a 50 basis point hike in the deposit rate in July
Meanwhile in the US, rates are starting to move back to the upside. Fed's Bostic walked back his comment about pausing in September. The Fed is still expected to hike rates by 50 basis points over the next 2 meetings at least.
Later today the US beige book will be released. Also Fed's Daly (San Francisco Fed Pres.), Williams (New York Fed Pres.) and Bullard (St. Louis Fed Pres.) will all be speaking.
Bullard has been advocating for the Fed to tighten rates to 3.5% by the end of the year. He is the most hawkish of the Fed officials.
