EUR/USD confined to 1.0400-1.0450 range despite easing EU-US tensions

EUR/USD remains range-bound between 1.0400-1.0450, trading at 1.0425 despite diplomatic improvements reducing Greenland-related tensions between the US and EU. The pair has struggled to break out of its narrow trading range as the dollar maintains strength on Federal Reserve officials' patient stance on rate cuts. Fed Governor Waller emphasized data dependency, suggesting rates could remain elevated through mid-2024 if inflation proves sticky. European Central Bank officials have signaled potential rate cuts as early as April, creating policy divergence that caps EUR/USD upside. Technical analysis shows strong resistance at 1.0450 (50-day moving average) and support at 1.0400 (recent lows). The pair's implied volatility has dropped to monthly lows, indicating traders expect continued consolidation. A decisive break above 1.0450 would target 1.0500, while failure at support opens 1.0350.