Even though the euro rallied at the beginning of the New York session, breaking above yesterday's highs, it quickly lost impetus and surrendered most gains. The lack of major events or indicators has left EUR/USD adrift, encased in a comfort area around 1.3000.
Elsewhere, the USD dollar is broadly mixed with the AUD standing as one of the best performers on Tuesday and the GBP on the other extreme as one of the worst, weighed by disappointing U.K. industrial production. Meanwhile, stocks are mixed in Wall Street and Europe.
Euro remains firmly in range
Technically speaking, the outlook has turned more neutral for the EUR/USD, with 1.2950 standing as a strong support (and possible bottom for the euro) and the 1.3100/30 area offering resistance at this point. However, the downside continues to be favored as daily indicators remain in negative territory but break of 1.2950 is needed to expose 1.2900.
On the other hand, EUR/USD has a psychological hurdle, the 100-day SMA and last week's highs conversing within the 1.3100/30 area, so a recovery above could improve the near-term outlook.
In this regard, the TD Securities team comments that the EUR remains firmly within range of the past week. "We remain more neutral on the single currency at the moment, but a strong base appears to be forming above 1.2950 and the EUR could be staging a turnaround", they say. "A break above 1.3120/30 would be constructive, although an empty calendar today could leave the pair in consolidation mode for another day".
Meanwhile, the UBS team holds a negative bias for the pair with initial support at 1.2955. "A break below would expose 1.2876 ahead of 1.2662. Resistance is at 1.3134", UBS comments.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.