EUR/USD is parked in an inside day range, traders await the next cue

• EUR/USD stuck in a range and awaits major data this week. 
• Traders will have both Eurozone and US economic data to potentially kickstart some major moves in EUR/USD.

EUR/USD is moving sideways during a US holiday parked inside of Friday's range at the upper end of it. The Euro has travelled a small distance between 1.0670 and 1.0704 vs. the US Dollar so far on the day. 

Liquidity is expected to remain thin for the remainder of the day with US markets closed for Presidents' Day. However, there is plenty at stake this week and from a technical standpoint, big moves are on the horizon. 

A flurry of recent data from the United States reinforced market expectations of tighter monetary policy from the Federal Reserve over the last several days, fuelling a firm recovery in the US Dollar last week. The DXY index, which measures the greenback vs. six other major currencies, rallied from a double-bottom low in the 102.50s last week and reached a high of 104.67, a six-week high. However, the squaring of that run has left the US dollar vulnerable while below 104.00 as it is today which is offering the Euro bulls some relief, albeit possibly only temporary. 

The US Dollar is still up almost 1.8% for the month, on track for its first monthly gain since September and the fundamentals will continue to flow this week with the minutes of the February FOMC meeting released on February 22.  ''Strong inflation and labour market data since then have turned Fed speak more hawkish,'' analysts at TD Securities said. ''Overall, the minutes are likely to be too outdated to impact markets meaningfully.''

We will also have the Core Personal Consumption Expenditure data that is known for capturing inflation (or deflation) across a wide range of consumer expenses and reflecting changes in consumer behaviour. It is the Federal Reserve's preferred measure for inflation which makes this week a crucial one for the US Dollar and market sentiment surrounding the central bank. 

''We expect core PCE prices to accelerate in January to its strongest m/m pace in five months, also outpacing the core CPI's 0.4% MoM gain,'' analysts at TD Securities said. 

''The YoY rate likely stayed unchanged at 4.5%, suggesting price gains remain elevated. The report is also expected to confirm that the consumer remains alive and kicking, posting an increase that is likely to more than makeup for recent weakness.''

This data will come out on February 24, but on February 23, the Eurozone will release the Final HICP Inflation reading for January year over year that could be revised up, cementing the inevitably of a 50 basis point rate hike by the Europen Central Bank next month. However, it will also potentially play into the sentiment that the ECB will not be done in March and will need to do more. The governor of the ECB, Christine Lagarde signalled at the prior meeting that March will not mark the final hike. 

All in all, there could be something for both the EUR/SD bears and the bulls this week in terms of the data, but the technicals are so far aligning bullish following the failed breakout on Friday:

EUR/USD technical analysis

At the start of the week's analysis, EUR/USD Price Analysis: US Dollar's failures above 104.20 DXY opens risk to 1.0720s, it was noted that the price was entering correction territory and we have seen a test already to the prior week's lows that have acted as support on Monday: 

That is not to say that we cannot see more downside. After all, there is money below 1.0670 from Friday's long positions towards 1.0650. However, with the Euro being on the back side of the trend and there being untapped territory above 1.0720, the focus is bullish until a break below Friday's lows near 1.0612.