Speculation about U.S. interest rate moves has led to some choppy EUR/USD trade that leaves the pair rooted in familiar ranges.
This will suppress volatility and fuel demand for currencies backed by higher yields.
Yesterday, the U.S. Federal Reserve Chairman Jerome Powell laid the foundations for a July rate cut, lifting EUR/USD slightly nL4N24C017.
For more bearish EUR/USD traders, this boosted the pair to the middle of a 1.11-1.14 range.
For less bearish traders, who think nothing has changed all year, the rally has only lifted EUR/USD off the base of a 1.12-1.15 range .
There are few EUR/USD shorts to chase now and little reason to go long IMM/FX.
That would take a major technical break, but EUR/USD has yet to reach 1.1280, a minimum technical correction of 2019's drop.
A soft U.S. consumer price index might boost fear of an unlikely 50-basis-point rate cut, lifting EUR/USD further, perhaps closer 1.14.
Without shorts to chase and with rates weighing whatever the cut, a break isn't likely.