EUR/USD: In Consolidation, Bond Yields Negate 1.17+

As the picture stands, the pair has firmed up its current range-bound profile, with well-defined edges between 1.17/1720 and 1.1650. The latest price action is inconclusive, dominated by market makers at the extremes of the range.

The negative brexit headlines in the last 24h, together with rising Italian bond yield premiums vs the German (purple line) and a steepening of the US yield curve (also slightly lower German vs US bond yield as per blue) all argue for the upside to be capped.

At this stage, pressure may be building up for an eventual break lower, although no clues were provided via price action on Wednesday. The soggy pricing of the pair this week is also a reflection of indecision on the back of a steady ECB and rising US yields.

In these type of market conditions, it's best to be patient and wait for the market to come to your levels rather than engaging in the middle of so much noise.

Trade safe!