EEUR/USD lands in an intraday range, traders wait for the next signal

• EUR/USD is range-bound and expects important data this week.
• Traders will have economic data from both the Eurozone and the US that could trigger major moves in the EUR/USD.

The pair EUR/USD moves sideways during a US holiday, parked within Friday’s range at the upper end of it. The Euro has traveled a small distance between 1.0670 and 1.0704 against the US dollar so far this day.

Liquidity is expected to remain tight for the remainder of the day as US markets will be closed for Presidents’ Day. However, the stakes are high this week and from a technical standpoint, big moves are on the horizon.

The latest data releases in the United States have reinforced market expectations of a tighter monetary policy from the Federal Reserve in recent days, fueling a strong recovery of the US dollar last week. The DXY index, which measures the dollar’s value against six other major currencies, recovered last week from a low of 102.50 and reached a high of 104.67, the highest level in six weeks. However, the squaring of that run has left the dollar vulnerable below 104.00, as of today, which is offering euro bulls some relief, if possibly only temporary.

The dollar is still up almost 1.8% on the month, on track for its first monthly gain since September, and the fundamental data will keep flowing this week with the release on February 22 of the minutes of the February meeting of the Federal Security Committee. Open Market (FOMC). According to analysts at TD Securities, “inflation and labor market data since then have made the Fed more hawkish” and “in general, the minutes are likely too out of date to have a significant impact on the markets.

Basic personal consumption spending data, known to reflect inflation (or deflation) of a wide range of consumer spending and changes in consumer behavior, will also be released. This is the Federal Reserve’s preferred measure of inflation, so this week will be crucial for the US dollar and market sentiment around the central bank.

We expect core CPI prices to accelerate in January to their strongest mom pace in five months, also outpacing the core CPI rise of 0.4% mom,” analysts at TD Securities said.

The year-on-year rate was probably unchanged at 4.5%, suggesting that price growth remains elevated.” Also reporting that the consumer is still alive and well, with an increase likely to more than make up for the recent weakness.”

These data will be published on February 24, but on February 23, the Eurozone will publish the final HICP inflation data for January year-on-year, which could be revised upwards, thus consolidating the inevitable 50 basis point rate hike by the Central Bank European next month. However, it could also fuel sentiment that the ECB will not be done by March and will have to do more. ECB Governor Christine Lagarde noted at the previous meeting that March will not be the last hike.

All in all, there could be something for both bears and EUR/USD bulls this week when it comes to data, but technical data is bullish for now after Friday’s failed breakout:

EUR/USD Technical Analysis

At the beginning of the analysis of the week, EUR/USD Price Analysis: The failures of US dollar above 104.20 DXY opens risk at 1.0725it was observed that the price was entering correction territory and we have already seen a test of the lows of the previous week that have acted as support on Monday:

This is not to say that we cannot see more falls. After all, there is money below 1.0670 from Friday’s long positions towards 1.0650. However, with the euro trailing the trend and untapped territory above 1.0720, the approach is bullish until a break below Friday’s lows near 1, 0612.