The European Central Bank meeting today and the Federal Reserve on Sept.
22 will challenge EUR/USD which has settled into a slightly lower range close to 1.16-1.19 ahead of both events.
The Fed's view is the more important of the two events and traders have shifted bets hugely in favour of the dollar, skewing risks for EUR/USD higher. nL1N2QA0MS
Option traders are unimpressed with vols staying low which means they don't see much change to the quiet spell that has engulfed EUR/USD this year.
Changes in betting have resulted in a series of slowly declining ranges that fell within 1.1909 and 1.1664 for the last two months.
A deeper drop requires speculators to short EUR/USD. nL1N2QA0LT
The 1.1909 high has traded three times and seems tied to month-end flows trading on June 30, July 30 and Sept 3.
The brief drop below 1.1700 met the criterion to correct the 1.0636-1.2349 rise seen between March 2020 and January 2021 leaving a solid uptrend.
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