EUR/USD back above 1.1400 on a quiet day for markets

EUR/USD moved to the upside during the American session, rising back above 1.1400. The euro found support at 1.1380 and bounced modestly to the upside. The pair moved all day in a range of less than 40 pips. 

EUR/USD flat for the day

Currently, the pair trades at 1.0405, the strongest level since the beginning of the European session and around the level it closed last week. It is consolidating after being unable to break the 1.1445/50 zone on Friday. 

Low volatility characterized financial markets on Monday. European shares finished higher while on Wall Street, the Dow Jones was up 0.10% and the Nasdaq 0.50%. In the bond market, US yields were little change. The 10-year moved marginally off 2-month highs to 2.372%. The Bund dropped to 0.543% after reaching 15-month highs on Friday. 

The bond market has been a key driver of price action for EUR/USD. Volatility in the bond market could rise on Wednesday, when Janet Yellen presents testimony before the Committee on Financial Services of the House of Representatives. She is expected to discuss the outlook for Fed's monetary policy and the economy. 

Technical outlook 

“The short term technical picture is neutral-to-bullish, as in the 4 hours chart, the price held above a bullish 20 SMA, with the Momentum indicator heading lower around its 100 level and the RSI hovering around its 50 level”, said Valeria Bednarik, Chief Analyst at FXStreet. 

Beyond the 1.1460 resistance, she sees scope for the euro to extend its gains up to 1.1520/30. “The risk will turn towards the downside only with a break below 1.1290”, concluded Bednarik.