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EUR/USD struggles at the $1.32 level

Following the sell-off in the wake of ECB president Mario Draghi’s somewhat dovish comments last week, the euro has recovered some of its composure against the dollar after Friday’s weak US employment data.

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EUR/USD looked to test the $1.32 level this morning in the run up to the release of the eurozone Sentix confidence data figures. Having hit a six-month high last month, the index turned positive today for the first time in over two years, swinging to from -4.9 points in August to +6.5. This would more than imply that investors are upbeat about the European situation and moreover the outlook for the region.

With today’s calendar being fairly meagre in respect of market moving data, one could expect to see a fairly range-bound scenario for this forex pair, though US secretary of state John Kerry’s speech about possible action in Syria is creating something of a bias to a stronger dollar.

The $1.3185 level has been important for this pair so any breach sets up a return to $1.3160. The 50-hour moving average resides at $1.3150 and a failure to hold at this level could send the pair back down the base support of $1.31. EUR/USD has not traded above the 200-hour moving average ($1.3207) since 28 August, so any upside break could target the $1.3250 area.

Spot FX EUR/USD (DFB) chart

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