Risk aversion led markets’ opening this week, following the terror attacks in Paris this weekend. The EUR sold off during the Asian session and traded as low as 1.0685 against the greenback. The European morning brought some relief to high yielders, but generally speaking, safe havens are on demand.
The EUR/USD pair recovered up to the 1.0750 region, from where is now retreating, ahead of the release of the EU October inflation figures. Expectations are of a 0.1% advance monthly basis, whilst the annual figure is expected to remain flat. Later in the US session, the country will release its NY manufacturing index, expected at -6.00 from a previous -11.36.
From a technical point of view, the 4 hours chart shows that the price remained capped by an horizontal 20 SMA, whilst the technical indicators have turned slightly lower below their mid-lines, albeit lacking directional strength. Given the lack of momentum, the pair needs to break below its recent multi-month low a 1.0673 to confirm further intraday declines, with a short term target then in the 1.0620/30 price zone. Above 1.0760 on the other hand, the pair can extend its advance up to 1.0800, but selling interest around this last is expected to maintain the upside contained.