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  • Euro posts modest gains versus US dollar despite risk aversion.  
  • US data mostly ignored by markets, Beige Book next and ECB meeting on Thursday.  

The EUR/USD pair printed a fresh daily high at 1.1323 during the US session and then pulled back modestly. As of writing trades at 1.1310/15, slightly higher for the day.  

The euro bottomed at 1.1284 (2-week low) but quickly bounced to the upside on the back of US data and lower US yields. Price action  continues to be limited among major European currencies.

The price range on Wednesday so far has been of 40 pips. The recovery of the euro appears to be weak but so far EUR/USD remains above 1.1300 despite the strength of the greenback against commodity and emerging market currencies.

Data released today in the US showed lower-than-expected employment growth in the private sector, although January’s number was revised sharply higher. The trade deficit in December came in above expectations. In about two hours the Fed will release the Beige Book. In the Eurozone, tomorrow the European Central Bank will have its policy meeting. Recently Bloomberg reported that the central bank will cut the growth outlook by enough to warrant new long term loans (LTROs).

EUR/USD Short-term levels to watch  

The area around 1.1325 is the immediate resistance followed by 1.1340 (Mar 5 high) and 1.1355. On the flip side, support might lie at 1.1305 (20-hour moving average) 1.1290 and 1.1265.