There’s a total of €4.5 billion sandwiched between 1.1300-25
That is potentially going to keep price action mired in a narrow range in the coming sessions before they roll off at 1400 GMT today. The near-term price bias is still sitting in favour of buyers as price holds above both key hourly moving averages but so far any key extension above the 1.1300 handle remains a step too far.
If price can start looking towards a break above 1.1345-50, I would expect it to extend towards the 1.1400 handle without much fuss. However, it’s a tough ask for the euro despite the fact that economic data has been slightly more optimistic recently.
A good gauge of market expectations towards any positive momentum in the euro is the 5-year inflation swap forward – often seen as the long-term gauge of inflation expectations of the Eurozone i.e. how confident is the market in the ECB achieving its price goal.
Although the measure is off its lows for the year, it still is a far cry from signaling that the euro should see a meaningful and/or sustained rebound with the ECB signaling that they won’t raise rates at all this year.