With U.S. markets shut on Monday, we had a pretty quiet market and low market volatility. Thus, any larger market movements were lacking and both of our major currency pairs fluctuated in narrow sideways trading ranges.
During Asia-Pacific trading hours the euro finally dropped below 1.06 and is now within its support area between 1.0580 and 1.0560. Given the recent bearish momentum the euro may extend its losses towards 1.0550 but in short-term time frames the single currency is in an oversold territory which is why we could see some pullbacks today. Current resistances are seen at 1.06 and 1.0635 from where sellers may jump back in.
German and Eurozone PMI reports are scheduled for release at 8:30 and 9:00 UTC but these reports are not expected to have a significant impact on the euro.
The British pound was unable to break through the 1.2480-barrier and finally gave up its modest gain, sliding back towards 1.2430. If the pound falls below 1.2425, we may see further losses towards 1.24 and possibly even 1.2350. Sterling bulls should however wait for prices above 1.2480 in order to buy sterling towards 1.2550.
Bank of England Governor Mark Carney will testify before the U.K. Parliament at 10:00 UTC and his comments could have an impact on the pound’s price action.
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