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  • EUR/USD keeps the familiar range in the low-1.10s.
  • US trade deficit shrunk more than expected in October.
  • US CB’s Consumer Confidence next of relevance.

EUR/USD maintains the tight range around the 1.1000/20 region on Tuesday amidst a so far uneventful week.

EUR/USD holds on above 1.10

Spot exchanges gains with losses in the first half of the week, always against the backdrop of the cautious stance in the greenback and ‘radio silence’ from the US-China trade front, where both parties keep emphasizing how close a deal is (?).

In addition, the euro remained unfazed after the German Consumer Climate tracked by GfK came in a tad better for the month of December. This result adds to Monday’s tepid improvement in the German IFO and the latest advanced PMIs, collaborating with the idea that the slowdown in the domestic economy and – by proxy – in the broader Euroland, could have bottomed out.

Across the ocean, advanced trade figures showed the trade deficit is seen shrinking to $66.53 billion in October. Additional data, this time from the housing sector, saw the S&P/Case-Shiller Index expanding at a non-seasonally-adjusted 2.1% on a year to September, matching consensus.

Later in the day, the key Consumer Confidence gauge is due along with October’s New Home Sales.

What to look for around EUR

Spot has been rejected from the vicinity of the 1.1100 barrier once again last week, sparking the subsequent knee-jerk to the vicinity of the critical support at the 1.10 handle. As always, EUR is expected to keep tracking trade headlines and USD-dynamics for the time being. On the more macro view, the slowdown in the region appears far from abated despite some positive results from key fundamentals in Germany. This does nothing but justify the ‘looser for longer’ monetary stance by the ECB and the cautious/bearish view on the European currency in the medium term.

EUR/USD levels to watch

At the moment, the pair is gaining 0.04% at 1.1017 and faces the next hurdle at 1.1097 (monthly high Nov.21) followed by 1.1169 (200-day SMA) and finally 1.1179 (monthly high Oct.21). On the downside, a break below 1.0989 (monthly low Nov.14) would target 1.0925 (low Sep.3) en route to 1.0879 (2019 low Oct.1).