13.08.201912:15 Forex Analysis & Reviews: EUR/USD in a narrow range and the euro is more likely to break through the lower border than the upper one

The EUR/USD pair is trading around 1.1200, which can already be called the usual level. The problems in the Italian Senate have added to the political uncertainty, and this puts pressure on the euro, but the dollar, on the contrary, is strengthening against the background of risk appetite. In general, the pair lacks a clear direction for the fifth day in a row. Last Tuesday, a Doji candle was formed on the chart– a sign of indecision and since then, EUR/USD remains trapped in a narrow range of 1.1250-1.1167. However, the fall of EUR/USD is limited around 1.1167 dollars. The stability of the euro at this level is due to rising tensions in the trade conflict between the US and China, the US and Iran, as well as protests in Hong Kong.

Now, the European Central Bank is pursuing a policy of negative interest rates. Also, the yield curve of German government bonds for the first time shows negative indicators. Taking these factors into account, many market participants now define the euro as the currency for financing, which grows in the absence of risk sentiment, and during the rise of risk appetite is used to finance the purchase of relevant assets. The pair may continue to hold the 1.1167 line if the risk decreases. However, the single European currency can break through the lower limit of the recent trading range, if the data on the German economy does not meet expectations.