Euro trades within tight range

The euro is slightly off versus the US dollar as the currency continues to trade sideways.

The euro is trading at $1.3677, down 0.4% as the currency has been meandering between positive and negative territory for the past few days.

It has been a quiet day in terms of economic data from the eurozone. The German government held a bond auction and the cost of borrowing for the Berlin administration fell from 2.64% to 2.53%. This indicates that bond traders prefer less risk to more, and would rather receive a lower rate in return. This tells me that investors are still cautious surrounding peripheral eurozone countries and emerging market economies.

The focus of the week will be on Friday, when the eurozone will announce inflation and unemployment figures, and the US will report gross domestic product. If we have weak results from the eurozone and strong numbers from the US it could push the euro off the tight trading range it has been stuck in.

Since we have taken out the $1.3680 level, which Brenda Kelly cited as a support level, we could be heading towards the 50-day moving average of $1.3640.

Spot FX EUR/USD chart

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