The EUR/USD pair maintained it’s offered tone through early NA session but has still managed to hold its neck above the key 1.15 psychological mark despite upbeat US housing market data.
The pair oscillated within a 20-pips narrow trading range and had a muted reaction to today's US data, showing a sharp rebound in building permits and housing starts during the month of June. Investors seemed reluctant to place aggressive bets amid slightly overbought conditions and ahead of the next big event risk - ECB decision.
Moreover, a tepid recovery US Dollar recovery, following its recent sell-off to 10-month lows, further collaborated to the pair's minor pullback to 1.1530-35 region from fresh 14-month highs touched in the previous session.
Subdued reaction to the US economic data clearly suggests that traders preferred to remain on the sideline heading into the key ECB monetary policy announcement, scheduled during European session on Thursday.
• ECB: Not-so great expectations - Rabobank
Technical outlook
Valeria Bednarik, Chief Analyst at FXStreet writes, "intraday technical readings favor the upside, as the price is developing above a bullish 20 SMA in the 4 hours chart, while technical indicators are currently resuming their advances within positive territory, after correcting the extreme overbought conditions reached on Tuesday. Little could be expected for the rest of the day, although a recovery above 1.1550, should lead to additional advances during the US session up to 1.1615."
