EUR/USD Trapped in Range Ahead of Central Bank Decisions

The EUR/USD exchange rate has been stuck in a narrow trading range between 1.1550 and 1.1600 for several sessions, as investors await fresh policy signals from the European Central Bank and the Federal Reserve.

This balance of opposing forces is reflected in the euro's support from stronger-than-expected eurozone economic data and rising inflation expectations, while the dollar has been underpinned by expectations that the Federal Reserve will begin tapering its asset purchases later this year.

Currency strategists note a lack of directional momentum in the market, saying 'The market is in a wait-and-see mode. Until we get clearer guidance from central banks, EUR/USD is likely to stay within these levels.'