EUR/USD remains directionless around mid-1.19s as markets await next catalyst

The EUR/USD pair fluctuated in a 50-pip range on Tuesday amid a lack of significant fundamental catalysts recording a daily high of 1.1976 and a low of 1.1926. As of writing, the pair was trading around 1.1960, staying virtually flat on the day. 

The sharp fall witnessed in the EUR/GBP pair on stronger-than-expected inflation growth figures from the U.K. made it difficult for the shared currency to gain strength against its peers. At the moment, the EUR/GBP pair was testing the 0.90 handle, losing 80 pips on the day. 

On the other hand, the only data from the U.S. showed that the number of job openings in the U.S. was little changed at 6.2 million despite a decrease of 58K decrease in government positions. Although the US Dollar Index made an attempt to break above the 92 mark during the day, it failed to extend its gains and was little changed on a daily basis at 91.90.

• US: Job openings (6.2 million), hires, and separations little changed in July

Tomorrow's economic calendar will feature employment change from the euro area, which is expected to ease to 0.3% from 0.4% on a quarterly basis for the second quarter of 2017. Later in the session, the PPI from the U.S. will be looked upon for fresh impetus. A robust growth in producer prices, which could translate into higher consumer inflation in the medium-term, could help the greenback gain traction, allowing the pair to stage a deeper correction.

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet, writes, "...in the 4 hours chart, the pair is developing below a marginally bearish 20 SMA, whilst technical indicators are recovering firmly from oversold territory, still below their mid-lines. As long as the price holds above 1.1910, the downward potential will be limited, yet below it, the pair could extend its decline down to a strong static support around 1.1870, while beyond this last, there's scope for an extension down to 1.1822, last week low. The pair would need to at least surpass Tuesday´s high of 1.1977 to gain some upward traction, but bulls won't come back in force unless the pair extends beyond 1.2030."

According to the analyst, supports for the pair could be seen at 1.1925, 1.1870 and 1.1825 while resistances align at 1.1990, 1.2030 and 1.2070.

• EUR/USD faces strong resistance around 1.2145 – UOB