EURUSD has been moving inside a range visible on its 1-hour time frame, finding support at the 1.1700 mark and resistance at 1.1800. Price is currently hovering around the mid-channel area of interest and could be due for a move back to support.
The 100 SMA is below the longer-term 200 SMA so the path of least resistance is to the downside. However, these moving averages are also holding as dynamic support for the time being and may be enough to push price back to the top of the range. Stochastic is on its way up to indicate that buyers are in control of price action for now.
The spotlight is on ECB Governor Draghi’s upcoming speech in the Jackson Hole Symposium as many are counting on him to share more details on tapering asset purchases. However, the latest ECB statement revealed that policymakers aren’t keen on giving more clues on their next moves just yet.
Meanwhile, the dollar has gained some support from safe-haven flows as the tensions with North Korea are resurfacing. The joint military exercises between the US and South Korea aren’t being viewed favorably by Pyongyang so there are concerns that this could prompt missile action from Kim Jong Un.
Euro zone data turned out weaker than expected so far this week as the German ZEW economic sentiment index fell from 17.5 to 10 versus the 14.8 consensus while the region’s index dropped from 35.6 to 29.3. Flash manufacturing and services PMIs are due and strong reports could allow the shared currency to rebound.
By Kate Curtis from Trader’s Way