EUR/USD remains sideways near 1.2250

• EUR/USD continued to trade in a small range above 1.2200. 
• US dollar rose marginally after lawmakers reach a deal to end the shutdown. 

The EUR/USD pair continued to move near the 1.2250 area. The pair dropped to 1.2222 after Democrats and Republicans at the Senate reached a deal to end the US government shutdown. It was trading at 1.2245, up 25 pips from Friday’s close. 

The greenback rose marginally after the deal to end the 3-day shutdown. Equity prices in Wall Street jumped to near record highs. The Dow Jones was up 0.25% at 26,135 slightly below intraday record highs. US bond yields moved away from lows back near multi-month highs. 

EUR/USD remained sideways near the end of the session, on a quiet day for markets ahead of Thursday’s European Central Bank meeting. Any approximation to 1.2200 was followed by a rebound while to the upside the area around 1.2280 continued to offer resistance. 

Technical outlook

“The pair remained confined to a tight range, but held most of the day  above Friday's close, and still technically neutral according to readings in the 4 hours chart, as it keeps swinging back and forth around a horizontal 20 SMA, whilst technical indicators eased, now heading south around their mid-lines with limited directional strength”, said Valeria Bednarik, Chief Analysts at FXStreet. 

According to her, the pair has an immediate support at 1.2200, and a stronger one at 1.2164, the low set last week, “with a break below this last favoring a steeper decline for this Tuesday.”