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EUR/USD back to square one

The price action in the EUR/USD on Friday was probably pretty typical, but nonetheless truncated again. The rise to a high at 1.0882 following the slightly weaker than forecast US PCE data was perhaps an overreaction, as noted here at the time. So, it was not such a surprise to see the Euro later hand that 30 pips or so gain by the time of the monthly close. The EUR/USD pretty much ended the month where it had been ahead of the US PCE report. The EUR/USD closed on Friday at 1.0848. So, last week was more about US data and the month end, but this week is surely more about the ECB, notwithstanding some very important US data later today and again on Friday. That is because on Thursday, at 12.15pm GMT the ECB is expected to lower rates.  For that reason it is probably not such a surprise to see the Euro hand back its modest gains versus the dollar into the monthly close on Friday. There will be plenty to add on the ECB outlook (not just the EUR/USD alone) as the week unfolds. Overnight the price action has been tight (1.0844-1.0859) and the Euro is right now bang on that 1.0850 pivotal level again 

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