EUR/USD has been quite volatile and corrective while residing inside the corrective range of 1.1200 to 1.1500 area for a few days in a row. Despite the strong likelihood of a rate hike by the Federal Reserve and persistent standoff between Italy and the EU, EUR managed to gain and sustain certain momentum, leading to more indecision and volatility.

This week EUR has been quite firm amid economic reports published recently. As a result, the currency gain impulsive momentum inside the bearish trend. There are certain measures taken by European Union today to ban money laundering on digital revenues. Moreover, the EU provided certain time for Italy to prepare a better budget proposal with a view of reducing debts than in the previous version, which whas been rejected earlier. Today French Government Budget Balance report was published with a slight increase to -87.0B from the previous figure of -87.1B and Spanish Unemployment Change report was published with a notable decrease to -1.8k from the previous figure of 52.2k which was expected to be at 34.2k. Moreover, along with ECOFIN Meeting being held today, PPI report was published with an increase to 0.8% from the previous value of 0.6% which was expected to decrease to 0.5%.

On the other hand, FED has been quite neutral. Some officials stated that they would not respond to every rise and fall in stocks that confused the market sentiment ahead of a rate hike this month. Nevertheless, this was bearish for USD. This week US ISM Manufacturing PMI report was published with a slight increase to 59.3 from the previous figure of 57.7 which was expected to decrease to 57.5 and Construction Spending report was published unchanged at -0.1% which was expected to increase to 0.4%. The mixed economic data confused the market, leading to certain weakness of USD and impulsive EUR gains today. FOMC member Williams is yet to speak about the upcoming interest rate and monetary policy decisions. Ahead of NFP this week which is expected to reveal mixed readings as well, USD is expected to be quite indecisive and slow with the progress ahead of the rate hike this month.

Meanwhile, further volatility and correction is expected in this pair. EUR found support from economic reports. USD is gaining ground with the sentimental bias ahead of Rate Hike this month. After NFP, the market will be able to express sentiment in this pair, leading to a certain trend direction before the year end.

Now let us look at the technical view. The price is currently residing below 1.1430-1.1500 resistance area while being in the bearish trend with certain volatility. As the price remains below 1.1500 area with a daily close, the bearish bias is expected to continue in the pair with a target towards 1.1200 area in the coming days. On the other hand, if the price breaks above 1.1500 with a daily close, the bearish bias is expected to convert to bullish resulting to price pushing higher towards 1.1600-50 area in the future.

SUPPORT: 1.1200, 1.1300

RESISTANCE: 1.1430, 1.1500, 1.1600-50

BIAS: BEARISH

MOMENTUM: VOLATILE