EUR/USD inter-markets: game of patience

A continuation of the offered bias around the greenback is now helping EUR/USD to attempt another bull run to the critical barrier at 1.1100 the figure, where sits the key 200-day sma, looking to break above the prevailing consolidative theme at the same time.

Yields in German and US money markets are trading on the defensive so far today, leaving the risk appetite trends and mainly USD-dynamics as the exclusive driver behind the pair’s price action.

Volatility tracked by VIX left yesterday’s tops and is now meandering daily lows, reflecting the dominance of the risk-on sentiment. The greenback, gauged by the US Dollar Index, is extending yesterday’s negative performance, coming down from tops near 96.60 to the current area of daily troughs in the 96.30/25 band.

It seems the ‘waiting-game’ is poised to extend a bit longer, as the current RO/RO trend will be put to the test in light of the key BoE MPC meeting due tomorrow. Consensus amongst traders sees the ‘Old Lady’ lowering its benchmark rate by 25 bp, (maybe) leaving the implementation of further measures to be announced most likely at the August meeting.

To sum up, the 200-day sma (currently at 1.1091) emerges as the initial up barrier if any bullish attempt prospers, followed by the 1.1190/1.1207 band, where is located the base of the 6-month rising channel and the uptrend off March lows.