EUR/USD remains defensive near 1.1720 on steady USD, German election

• EUR/USD prints minute gains on Monday in the Asian session.
• The US Dollar Index  turns slightly negative but still remains above 92.70.
• Germany’s election result weighs on the euro, ECB's Lagarde speech eyed.

The EUR/USD pair has been tracking minor gains in the Asian session on the first trading day  of the fresh week. After spending the previous week near 1.1750, the pair opened lower and hovered in a narrow trade band of less than 10-pips movement. At the time of writing,  EUR/USD is trading at 1.1719, up 0.05% for the day.

The US Dollar Index (DXY), which tracks the performance of the greenback against the six majors, pares some of its initial gains, Nevertheless still looks strong above 92.20, which keeps EUR/USD gains limited.

Investors digested the latest Fed’s monetary policy update. The central bank hinted stimulus could start being reduced in November and interest rates could rise as soon as next year, while trimming growth forecasts and hiking inflation projections for this year. The reduced risk appetite on the renewed concerns of China’s group Everngrandes default risk after the  interest payment deadline passed without any notification from the company and the People’s Bank of China (PBoC) remark on cryptocurrency by calling all digital currencies related activities as illegal, supported the greenback.

Meanwhile, the US House Speaker Nancy Pelosi announced a vote on the infrastructure bill would be cast  on Thursday as earlier she warned not to expect a Monday vote despite her confidence about the passage of the $1 trillion infrastructure stimulus package.

Traders refrained from positioning in the shared currency after Germany’s Social Democrats marginally won Sunday’s national election as per the projected results, and claimed a “clear mandate” to lead a government for the first time since 2005 and to end 16 years of conservative-led under Angela Merkel. Investors turn their attention to the European Central Bank President Christine Lagarde speech, and US Durable Goods Orders  data to take trade insight. 

EUR/USD additioanl levels