FXStreet (Edinburgh) - The recent bullish attempt to clinch the 1.3400 has proved to be ephemeral so far, as the EUR/USD is now returning to the 1.3380/75 band.

EUR/USD capped by 1.3400

The recent highs around 1.3400/10 remains elusive for EUR-bulls, mainly after the final figures for the inflation in the euro area showed an increase of 0.4% on a yearly basis and a 0.7% contraction inter-month, leaving the disinflationary pressures intact in the bloc. In the same tone, the economic activity expanded at an annual rate of 0.7% in the region, down from the 0.9% gain previously posted. “Bottom line is that he ECB will have to maintain an extremely accommodative monetary policy, even if the US will see a first rate hike already in 2015. The bank will likely be pressured to undertake additional action if some of the downside risks materialize”, commented Peter Vanden Houte, Analyst at ING Bank.

EUR/USD levels to watch

At the moment the pair is advancing 0.08% at 1.3376 with the immediate resistance at 1.3416 (high Aug.13) followed by 1.3418 (200-w MA) and then 1.3424 (21-d MA). On the downside, a break below 1.3348 (low Aug.14) would open the door to 1.3342 (low Aug.13) and finally 1.3336 (low Aug.12).

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