EUR Trading Outlook
EUR/USD Offers into 1.3850 and Asian sellers in the 1.2860-80 zone had Europe apply bearish pressure to EUR/USD in their morning. With risk sentiment sour on falling equity and commodity prices EUR/USD made a steady move lower and eventually hit a 1.2705 low before bounce near 1.2745 into NY's open. Early NY saw the pair lift after US econ data was better than f/c that eased some sour risk sentiment. The pair lifted near 1.2780 as EUR/JPY got most of the benefit on its rally from 134.75 to 135.20. EUR/USD then slipped back near 1.2730. the dip was bought as comments from Fed speakers Bullard and Kocherlakota put a bid into risk. Bullard's comments were the big impact as he noted the Fed could contemplate increasing bond buys depending on data while he also noted the decline in inflation expectations are a serious matter for the Fed. EUR/USD took off as risk assets (stock, commodities) saw big rallies off their lows. A NY high of 1.2840 was hit but the pair then slipped a bit as risk assets gave back some of their rallies. Late in the day the pair sat near 1.2800.A lack of major data in Asia & Europe will have traders focusing on equity & bond markets for cues.
EUR/USD Tight ranges held in Europe as EUR/USD hugged the 200-HMA. The pair sat near 1.2640 into NY's open & pre-US econ data. Below f/c retail sales, Empire Mfg & PPI rattled risk sentiment. US bond yields & the USD sank like a stone. EUR/USD spiked towards 1.2760. Offers ahead of the Oct 14 high allowed for a slight dip to 1.2735. The dip was bought as USD/JPY ran 106.50 stops & dived to a 105.20 low. EUR/USD spiked higher, pierced the 23.6 Fib of 1.3995-1.25005 & hit a 1.2887 high. A massive rebound in the USD saw much of the secondary spike gains erased & 1.2740/45 tested. More fears of Ebola hit the USD. This coincided with BoE's Weale sounding a bit dovish. EUR/USD lifted to 1.2815 and was aided by EUR/GBP's rise to 0.8046. A USD bounce late in the day then had EUR/USD !1.2780 as NY neared the close. Sep EZ CPI may get some play overnight but traders look to US data & numerous Fed speakers for their next cues. Any dovish rhetoric or weak econ data likley sends EUR/USD above 1.2900 and opens the door to big res near 1.3000 .
EUR/USD Europe pushed EUR/USD below the 200-HMA and hit 1.2640 as sour risk sentiment took hold. The pair hit a 1.2640 low as EUR/JPY's plunge from 136.25 to 135.04 weighed. An upward shift in risk sentiment weakened JPY a bit and lifted stocks. EUR/JPY bounced to 135.70. EUR/USD got only a slight lift and neared hourly resistance at 1.2680. The bounces faded though as US equity markets slid from their highs and gave back a good part of their gains. EUR/USD slid back near 1.2740 and EUR/JPY slipped towards 135.25. Both pairs sat near those levels late in the day. Traders now turn their focus to September inflation readings from China and Germany. China releases CPI & PPI while Germany gives the mkt CPI & HICP. Should the results come in soft EUR likely gets hit as deflation fears will increase. EUR/USD is then likely to run stops touted below 1.2600 and we'll then see the 2014 low back in play.
EUR/USD opened NYC 1.2686, +56 pips vs Friday night's close, O/N range 1.2621/98. NY session range 1.2665/99. Canada was closed and the US also was celebrating a national holiday, however stock markets & commodities were open giving FX markets something to trade off. US Treasuries traded higher as stocks slumped in early trade and the dollar got clocked early, the DXY having opened -0.54% but managed to claw back some 0.11% on the day. The Nasdaq whipped from -1.0% to +0.3% back to -0.8% and risk on / risk off tended to dominate FX. Comments from Weidmann Polish C/B chief Belka and earlier Greek political reports left NY traders edgy and reserve manager offers at 1.2700 rumored to be Russian intervention proceeds capped rallies.
EUR/USD The pair's failure to clear s-t resistance near 1.2720/30 gave Europe an excuse to sell EUR. sour risk sentiment and a firm JPY were added reasons. Bears sold EUR/USD from near 1.2715 towards 1.2650 before a bounce had it near 1.2670 into NY's open. Collapsing oil prices and increased risk-off sentiment, driven by soft equity mkts, saw NY push EUR/USD down further. The pair dived to a 1.2609 low. A turn in sentiment and some softening for the USD allowed the pair to lift to 1.2645 into the 10:00 am options expiry where large 1.2650 & 1.2625 XXX's sat. The rally was snuffed out though as Draghi hit the wires. He reiterated that econ outlooks remain on the downside while also noting that risks to inflation's outlook will need close monitoring. The pair approached the day's low but couldn't match it. Late in the day the pair sat just above 1.2615. Bears assert themselves again as the pair slips below the 10-DMA again. A test of 1.2500 may be due next week. EZ Sept. CPIs & German Oct ZEW are out next week. Soft results should pressure EUR lower & possibly see 1.2500 break. If 1.25 is cleared l-t bears eye roughly 1.2050.
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