EUR/USD: Unclear Bias Short-Term

The momentum in the pair has been clearly waning as the price action clearly reflects, with back-to-back long-topside tails. The US economy, unlike the EU, is not yet showing signs of major cracks in its economic momentum, even if the macro view of a decelerating US economy and contained inflation is a narrative gaining traction. The increase in Put premiums is a bad augur short-term, with options traders’ vol skewed now favoring a shift in what still can be argued to be a bullish momentum trade if one judges the 5-DMA slope. To further complicate the potential bias, the German vs US yield spread keeps diverging, which suggests capital flows in favor of the Euro. Overall, a pair exhibiting no clear clues to take either side from a daily perspective.