After a brief test of fresh lows around 1.0850, EUR/USD remains in a narrow range with the recovery capped around 1.0885/80 for the time being. EUR/USD focus on US ISM, risk The bearish tone around the common currency remains intact during the first half of the week, accentuated since yesterday after advanced EMU’s inflation figures have come in lower than expected for the current month. Market expectations of some sort of ECB action at next week’s meeting have been picking up pace since then, driving the euro lower and thus leaving the door open for further downside. In the meantime, the greenback will take centre stage later in the NA session in light of the ISM Manufacturing in the US economy, expected at 48.5 for the month of February. EUR/USD levels to watch The pair is now losing 0.04% at 1.0874 and a break below 1.0809 (low Jan.29) would target 1.0777 (low Jan.21) en route to 1.0709 (2016 low Jan.5). On the other hand, the next up barrier aligns at 1.0970 (55-day sma) ahead of 1.1047 (200-day sma) and then 1.1123 (38.2% Fibo of December up-move). For more information, read our latest forex news.