Technical Analysis

EUR/USD trades narrowly to start the session but sellers in near-term control

EUR/USD falls back under its key hourly moving averages

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The pair is just trading in a 23 pips range so far today but is holding around 1.1240 levels currently, as sellers are keeping near-term control on a push under the key hourly moving average @ 1.1254-57 earlier in the day.

That sees the near-term bias keep more bearish for now but support from the 61.8 retracement level @ 1.1237 is keeping the downside limited.

The overall risk mood remains on the defensive and more cautious side but among major currencies, there isn’t any major hints of a risk-off wave just yet.

That is keeping things more calm and EUR/USD is also seeing a narrower trading range for the time being at least. Looking ahead, the dollar side of the equation i.e. the risk mood remains the key factor to be mindful about.

The rising US coronavirus cases and hospitalisations were a cause for concern in the market yesterday, so all eyes will continue to be on that in the day ahead.

Fears are growing that this may lead to a hiccup in the economic recovery and a worsening situation will only serve to dash market hopes of any quick return to normal.

For EUR/USD, the key hourly moving averages @ 1.1254-57 remains the key region to watch. Keep below that and the bias remains more bearish but break back above and the bias will start to favour buyers once again.

As for other levels today, there are decent sized expiries rolling off on either side of the picture at 1.1200 and 1.1300 respectively. Not to mention a decent amount at 1.1260 as well. But risk flows are likely to still be the main driver in the coming sessions.

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