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EUR/USD takes a breather above 1.3700

FXStreet (Córdoba) - The EUR/USD is taking a breather Wednesday, as all the attention has been taken by the pound, consolidating in a tight range above 1.3700 following yesterday's slump.

The EUR/USD extended losses to a 5-week low of 1.3688 Tuesday amid reports stating even the German Bundesbank would back ECB easing measures if needed. However, the pair bounced and managed to steady above 1.3700 and has spent the last sessions in a tight range ahead of Bundesbank's Head Jens Weidmann speech, scheduled for 14:30GMT. Investors will now will wanna hear what he has to say following Draghi’s hint and yesterday's rumors.

EUR/USD levels to watch

At time of writing, the EUR/USD is trading at the 1.3710 area, little changed on the day, with immediate supports seen at 1.3688 (May 13 low), 1.3672 (Apr 4 low) and 1.3642 (Feb 27 low). On the flip side, resistances could be found at 1.3739 (100-day SMA), 1.3774 (May 12 high) and 1.3800 (psychological level).

Sterling falls as BoE's Inflation Report disappoints investors

In its Quarterly Inflation Report, released on Wednesday, the Bank of England suggested that rates would stay low for at least one more year. Once they start rising, the process will be only gradual. It acknowledged the improvement in UK economy but pointed to the need to absorb more slack.
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