EUR/USD – Another day of range bound trading?

EUR/USD has been going nowhere for last ten trading days as somewhat hawkish ECB and fear of an early rate hike in the US forced investors to stay on the sidelines.

The pair has been restricted largely to a narrow range of 1.12-1.13. It appears the spot may remain stuck in the range today as well on account of caution ahead of the FOMC rate decision.

US CPI is due for release today

US CPI for the month of Aug is seen rising 1.0% compared to the expected figure of 0.8%. The data could be ignored as almost no one in the market sees the Fed moving rates next week.

However, traders still have Yellen’s comments- case for rate hike has strengthened - at the back of the mind. Thus, dollar selling is not gathering pace.

EUR/USD Technical Levels

A breakdown of support at 1.1231 (10-DMA) could yield a re-test of 1.12. A violation there on day end closing basis would expose 1.11 handle (range breakout target). On the higher side, breach of 1.1248 (Pivot) would open doors for 1.13 (zero figure) and 1.1327 (Sep 8 high) levels.