There's not much appetite for traders to stray away from the prevailing price action to be honest. The euro remains on the softer side as the ECB reaffirms more rate cuts to follow next year. That sees traders pricing in ~89% odds of a rate cut for January for now. Meanwhile, the Fed is surely going to cut rates by 25 bps this week and perhaps pause in January. That's the bigger known unknown right now and traders are waiting for that before reacting.
As such, we're caught in a bit of a rut for EUR/USD with price action pinned down by key near-term levels as seen above. The 200-hour moving average (blue line) in particular is holding back any upside moves for the time being. That is seen at 1.0525 currently, coinciding with large option expiries on the day.
Put together, that should likely keep a lid on price action at least for European trading later. The key risk event today will be the US retail sales data.
But in the context of this week, traders are all looking to the Fed for the next set of clues. As such, we might not get any meaningful or lasting moves until we hear from the Fed statement and Powell on late Wednesday.
This article was written by Justin Low at
www.forexlive.com.
