- EUR/USD oscillates within a tight range on Tuesday amid mixed fundamental signals.
- Investors are also choosing to stay on the sidelines pending key central bank events this week.
- The decline in the pair seems limited due to the reduction of expectations for more aggressive easing by the ECB.
The pair EUR/USD is struggling to capitalize on the strong gains recorded over the past two days and oscillates within a tight range during the European session on Tuesday. The pair is trading around 1.0850, virtually unchanged on the day and just below the one-week highs reached the previous day.
Investors seem reluctant and prefer to wait for this week's key central bank events before opening aggressive directional positions, which, in turn, leads the EUR/USD pair to trade within a moderate range. The testimony of the president of the Federal Reserve (Fed), Jerome Powell, before Congress on Wednesday and Thursday will be taken into account for clues about the path of rate cuts. This, together with the monetary policy decision of the European Central Bank (ECB) on Thursday, will help determine the pair's near-term path.
Separately, this week investors will be faced with the release of important US macroeconomic data scheduled for the beginning of a new month, including monthly employment details, or the nonfarm payroll report (NFP) on Friday. Meanwhile, lowering expectations for a quick interest rate cut by the ECB continues to act as a tailwind for the common currency. The US dollar, meanwhile, is weakened by expectations that the Fed will begin cutting rates in June, lending support to the EUR/USD pair.
However, the slight deterioration in global risk sentiment, reflected in a softer tone in stock markets, benefits the safe-haven Dollar, limiting the pair's upside. Therefore, it is prudent to wait for strong buying before taking a position on the EUR/USD pair, which has rebounded from levels below 1.0700, i.e. the three-month low reached on February 14. It
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
