EUR/USD quietly consolidates above 1.06

Despite an increased volatility during the first trading hours of the NA session, the EUR/USD pair stayed in a 50 pip range on Tuesday. After rising to 1.0630 on USD weakness, the pair lost its bullish momentum and came back towards 1.06 area where it has been spending the last few hours. At the moment, the pair is up 0.02% at 1.0606.

The risk aversion has been the main driver of the price action on Tuesday as investors sought refuge amid heightened concerns over Syria and North Korea. "Geopolitical risk is the focal point right now," Quincy Krosby, market strategist at Prudential Financial in Newark, New Jersey told Reuters.

Other than the Whole Sale Price Index from Germany and the Import/Export Price Index from the United States, there are no noteworthy macro data due tomorrow. Market sentiment could remain as the main catalyst in near-term. However, the EUR/USD pair hasn't made a decisive move in either direction since the beginning of the week.

Technical outlook

The pair could encounter the first resistance at 1.0630 (100-DMA/daily high) on its way to 1.0700/10 (psychological level/20-DMA) and 1.0815 (200-DMA). On the downside, supports could be seen at 1.0570 (Monday's low/monthly low), 1.0455 (Jan. 11 low) and finally 1.0390 (Jan. 4 low).

• EUR/USD still risks a test of 1.0525 – UOB
• EUR/USD near term outlook remains negative – Commerzbank