As attention shifts from a slowdown in the euro zone to one in the United States, EUR/USD may push its boundaries but it's not likely to break them.
A month into 2019, EUR/USD is trading on familiar ground, near the middle of the rough 1.12-16 range that's held for several months.
The pair traded 1.1570 on talk of U.S. recession and rate cuts and 1.1289 after European Central Bank Governor Mario Draghi acknowledged the slowdown data had already revealed.
Underlying interest rates still support the dollar, but the gap has narrowed and no further widening is expected.
Traders are probably still betting EUR/USD will fall, but not so aggressively.
Option vols are low, and if carry trades need to be funded, the euro is a cheap and liquid way to do so.
With such big influences pulling EUR/USD in opposing directions, a breakout isn't likely.
EURUSD daily Click here