EUR Trading Outlook
EUR/USD The pair stayed 1.2300/30 for Europe's morning ahead of the ECB & Draghi. Rates were left unchanged as f/c so focus was on Draghi's presser. His initial remarks sent the pair to a new trend low 1.2278. Draghi initially stated asset buys will have a sizable impact on the b/s, reiterated the b/s reaching levels of early '12 while also noting significant & increasing differences in mon pol cycles between major regions. The losses were short lived after Draghi noted that early next year would see a reassessment of monetary stimulus. The market saw this as no QE present for the holidays. EUR/USD took off & neared 1.2420. ECB projections for growth & inflation were lowered and the pair dipped to 1.2340. The dip was bought as broad USD weakness entered the market. The buys cleared the 200-HMA and a 1.2457 high was hit. The pair slid to 1.2360 after Europe's close as the USD clawed back some losses. Late in the day the pair sat near 1.2370. The EZ Q3 GDP revision is due tomorrow but all eyes will be on US jobs data for trading cues.
EUR/USD The pair got smashed from the 1.2380 area towards 1.2320 in Europe's morning on a combination of soft EZ services PMI and rising US yields. NY walked in with the pair sitting just off Europe's low. Early action saw a lift to 1.2345 after the ADP and US labor costs come in on the soft side. The rally quickly faded though as the USD regained its composure on a resumption of the US yield rally. Europe's low was cleared and the pair hit a 1.231 low. Large bids protecting a 1.2300 barrier prevented further losses but the bounce off the low was minimal. Late in the day the pair sat near 1.2310. The ECB is the big risk coming up. No new action is expected from the market and that may lead to a knee-jerk profit taking rally. A reaction like that is only an opportunity for those looking to get short do so. It is widely expected that Q1 will see new action from the ECB and that will keep EUR rallies limited at best.
EUR/USD Early Europe saw the pair hugging the 200-HMA. Bears emerged though as the USD went broadly bid on rising US bond yields. The pair slipped from near 1.2465 and sat just below 1.2440 into NY's open. NY wasted no time in applying bear pressure. US yields added to gains and USD/JPY broke above 119.15 to have the USD bid across the board. EUR/USD slid lower with virtually no bounces as US-German yield spreads went further in the USD's favor. The pair traded down to the 1.2375/80 area and saw little bounce as it held near there late in the day. Traders eye the 1.2350 barrier after the pair failed to hold above the 10 & 21-DMAs. The barrier may get a test if services PMI data from the EZ and China are soft. Should the barrier break another leg lower for EUR/USD is likely as the break means the recent consolidation phase is done. A test of weekly lows in the 1.2240/95 is then likely to ensue.
EUR/USD The JPY strength post-Japan downgrade by Moody's sent EUR/JPY spiking lower towards 147.05/10. EUR/USD was dragged along reluctantly ad it hit 1.2419. Bears could push no further though as USD weakness trumped JPY. this saw The pair quickly bounce off the day's low towards 1.2480 before slipping near 1.2460 as NY opened. More USD weakness and a slump for US bond yields saw that dip bought. A high of 1.2507 was hit. Much of NY's gains were eroded though after US November ISM beat forecasts. the pair slipped down to the 200-HMA, bounced briefly above 1.2500 again but sat just below 1.2475 late in the day. The pair may chop around in the 1.2350/1.2600 range for the remainder of the week. A fair number of option expiries near the 1.2500 region and upcoming event/data risks (ECB, US jobs data) are likely to keep the pair from staying outside that broad range.
EUR/USD opened New York 1.2474, +6 pips vs last night's close and -31 pips from Wednesday's NY close. The OPEC meetings inability to agree on production cuts boosted the DXY overseas, it opened NY +0.44% and is closing the session +0.83%. EUR/USD looks set to close c 1.2435/40 having traded a choppy 1.2426/90. No US stats left the market vulnerable to cross influences and USD/CAD buying due to the weak commodity complex and soft oil triggered stops in EUR/CAD which is closing the session +0.70/0.75%. Oil prices - 9.6% WTI & -2.6% Brent forced corrections in other commodity currencies, most notably EUR/NOK +1.0/1.05%, EUR/USD closing 1.2434.
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