Price action of late harkens back to last summer when EUR/USD plied narrow, option- constrained ranges. The underlying fundamentals are slightly altered with central bank reserve diversification a bit more prevalent of late but rallies are limited as the market slowly sheds its USD-bearish outlook owing to solid near-term US fundamentals.
EUR/USD was able to stage a modest range-extension rally in Europe this morning, triggering stops above the 1.2940/45 area but follow-through has been underwhelming. The US calendar is empty save for Fed speakers today. Bernanke speaks, but the subject is income inequality and there is no Q&A period, so expect little market-moving news from this address. The 1.2910/15 area continues to contain dips near-term while 1.2960/80 is toppish near-term.
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