While the euro showed only little movement on Tuesday, short traders that sold the British pound have benefited from the downswing until a low of 1.2169. Volatility in the EUR/USD is still low with the currency pair remaining range bound. Euro traders await tomorrow’s ECB meeting for further direction. Until then, we may have to watch the euro trading between 1.0640 and 1.0490. In the hourly chart we currently see a higher likelihood of upcoming bearish momentum, provided that the euro drops significantly below 1.0560. This assumption is based on a descending triangle in the hourly chart. If the euro breaks however above 1.0575, that chart pattern becomes void.
Unlike the euro, the GBP/USD could be vulnerable to pullbacks after having dropped as low as 1.2169. If the pound breaks above 1.2215 we may see a correction towards 1.2250 and 1.2280.However, if sterling falls back below 1.2190 it could extend its losses towards 1.2140/30.
In short-term time frames we see an ascending triangle which could predict upcoming bullish momentum.
From a fundamental perspective, the only interesting piece of economic data will be the ADP Employment report scheduled for release at 13:15 UTC which could have an impact on the greenback.
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