The EUR/USD has continued to maintain its range for most of this year. Since early January, we have been able to break out of a range that effectively spans 1.2250 to 1.2450. Of course we’ve had a few tests, but nothing has materialized.

Last week we had a look at the ECB minutes and the overall consensus was that they were a little dovish. ECB President Mario Draghi has been quiet for a number of months now and there has been very little coming out of the ECB.

No word on developments on QE and a rate hike appears to be a distant dream at the moment. With that in mind, it is still the USD doing most of the work for the EUR/USD.

This week we have a few key data points to watch out for. Monday brings US retail sales. And what is probably a more important number will be Eurozone CPI which is scheduled for release on Wednesday.

A lack of inflation has been the issue for most economies in recent years, especially the Eurozone. We’ve seen an increase from 0 up to the current levels of 1.4% annualized. 2% is where most central banks feel most comfortable.

Big Support

As mentioned previously the key resistance level around the 1.2450 and key support at 1.2250 are my major pillars.

We are seeing the same type of range in the USD (via the DXY) and that means the Greenback is the major driver.

I’m looking to buy the dips mostly. A move to 1.2250 is a buying opportunity for me. I find that the real lack of direction makes this a tricky trade. It’s far easier to trade the EUR/USD when we have a directional move. So with that in mind I will be sticking with the range and waiting for my chances.

EUR/USD – 240 min Chart.