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EURUSD retraces to upper bound of side trend

The EURUSD pair rose 0.36 to 1.1367 on Tuesday, January 11. The gains started during the Asian session and were capped by a decline in the EURGBP cross during the European session. The key pair dropped to 1.1285 ahead of Fed Chaiman Powells testimony before the US Senate Banking Committee. Investors were upbeat about the lack of surprises in Powell39;s speech. He said that he was determined to battle inflation, and it would take two to four meetings to decide on the balance sheet runoff. The Fed Chair allayed fears that the central bank would be overly aggressive in shrinking its huge balance sheet. The 10year UST yield retreated to 1.734 after Powells speech, while the DXY dropped to 95.57. The euro surged to 1.1375. Todays macro agenda GMT3 1300 EU industrial production November 1630 US CPI December 1715 UK BoE Governor Jon Cunliffe 1830 US EIA weekly petroleum status report Current outlook By the time of writing, the single currency was trading at 1.1371. Major currencies are trading in positive territory, except for the yen and franc. The demand for risksensitive currencies remains. Price action is at the upper end of the 1.12301.1385 side trend. Todays highlight is US CPI data, which could push the euro back down to 1.1300. Heightened volatility is expected for major pairs following the release. If buyers hold the 1.1350 level until Thursday, by the end of the week the price is expected to break out of the 1.5month range and test the 1.1450 level. Bottom line The…

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