EUR/USD keeps losses near 1.1350 amid lack of fresh impetus

The EUR/USD pair is moving back and forth in a 40 pips narrow range so far this session, trading directionless in absence of relevant fundamentals, while thin volumes and irregular volatility, with the US markets closed, leaves the pair at the mercy of the USD dynamics.

EUR/USD back to test 10-DMA at 1.1330?

Having failed several attempts to surpass stiff resistances located near 1.1375 region, the EUR/USD is seen heading back towards the daily lows struck at 1.1336, as the US dollar extends its recovery mode across the board on upbeat US manufacturing data-led optimism.

As a result, monetary policy divergence between both continents is back into play, on increasing Fed rate hike bets, while markets believe that the ECB tapering talks are being overdone.

However, the losses remain capped as the Euro continues to derive some support from the prevalent risk-off sentiment in the markets, in the wake of increased cautiousness after North Korea launched an Intercontinental Ballistic missile today.

Meanwhile, markets overlooked downbeat Eurozone PPI data, which arrived at -0.4% m/m in May versus -0.2% expectations.

EUR/USD Technical Levels

According to Slobodan Drvenica at Windsor Brokers Ltd: “Slow stochastic reversed from overbought territory and shows room for deeper correction. Pivotal support at 1.1320 (Fibo 38.2% of 1.1118/1.1445) is under pressure and break here would generate stronger bearish signal. Extension towards next pivot at 1.1243 (20SMA/Fibo 61.8%) seen on break below 1.1320/00. Tops at 1.1445 now mark strong offers. US is closed today for Independence Day and quiet trading is expected.”