FXstreet.com (Barcelona) - After the semi-vegetative state in which the Euro exchanged hands vs the U.S. Dollar in a comatose 1.33-1.3330 range in 24 hours of trading on Monday, the action is set to return to the market. The much anticipated BoJ monetary policy decision is out of the way and the U.S. market will re-open after Martin Luther King festivity.
Overall, the EUR/USD trades in a well defined short term 1.3260-1.3400 consolidative period, with either edge of the range having to give up as a pre-requisite to clear up the picture for traders. Ahead of London, the EUR/USD has been launched higher by Asian traders, currently at 1.3350, a move preemptive of what might come next, since the underlying trend continues being bullish.
According to Richard Lee, FXstreet.com technical contributor, "the current setup is indicative of further consolidation in the single currency, with potential for a near term retest of 1.3400." Meanwhile, FXWW founder Sean Lee, is more modest on his views: "EUR/USD is still being driven by cross flows and the market is quite neutral at the moment on the market's two largest currencies."
On the fundamental front, the most relevant EUR-related news was the appointment of Jeroen Dijsselbloem, Dutch Finance Minister, as the new president of the Eurogroup. As a peculiar note, German finance minister Mr. Schauble said to reporters that Spain was the only country not supporting the appointment of Dijsselbloem for head of the Eurogroup.
Today, the Eurogroup finance minister meeting is due to resume its second day of talks. According to Kathy Lien, co-founder at BKassetmanagement, "while nothing new is expected tomorrow, we will still be watching the headlines out of Europe especially with ECB President Draghi expected to speak in the afternoon."
Another area of interest for Euro traders today will be the release of key economic data, such as the German ZEW survey, where an upbeat number is expected in the sentiment index.
"With European bond auctions going very well, sovereign debt risks receding further and the DAX hovering near 5 year highs, there are many reasons for investors to be optimistic but there are also concerns about growth that could affect confidence. Aside from the ZEW survey, Eurozone PMIs and the IFO report will also provide us with a better gauge of whether economic activity validates some of the concerns that we have heard about Eurozone growth" Ms. Lien adds.