EUR/USD fluctuates in tight range above 1.10 ahead of Tuesday's key data
- Industrial production in the eurozone expanded in August.
- US Dollar Index looks to post modest daily gains near 98.50.
- Coming up: ZEW sentiment data from Germany and the eurozone.
Boosted by the broad-based USD weakness seen on Thursday and Friday, the EUR/USD pair gained traction and closed the last week in the positive territory. With the market action turning subdued amid a lack of significant macroeconomic drivers on Monday, however, the pair struggled to push higher and retraced a portion of last week's gains. As of writing, the pair was down 0.17% on the day at 1.1020.
Earlier in the day, in its monthly publication, the Eurostat reported that industrial production in the eurozone in August expanded by 0.4% on a monthly basis in August. The annual growth rate, however, slumped to -2.8% and fell short of the market expectatşın of -2.5% to weigh on the shared currency.
Attention shifts to eurozone sentiment data
Meanwhile, European Central Bank's vice-president Luis de Guindos on Monday reiterated that he does not expect the eurozone to enter into a recession and noted that the latest development regarding the United States (US)-China trade deal was "good news."
On Tuesday, the ZEW Economic Sentiment Index reading for Germany and the eurozone will be looked upon for fresh impetus. Markets expect the Economic Sentiment Index in Germany to worsen to -27.3 in October from -22.5 in September.
On the other hand, the US Dollar Index took advantage of the subdued market action and recovered to 98.50 area on Monday to keep the modest bearish pressure on the pair intact. The pair is unlikely to break out of its daily trading range in the remainder of the day due to thin trading conditions on the Columbus Day holiday in the US.
Technical levels to watch for