EUR Trading Outlook
EUR/USD Europe bought EUR/USD right out of the gate as the pair sat just below 1.3350. The lift had the pair near 1.3380 into NY's open. The higher than forecast jobless claims data sent US yields lower and narrow yield spreads. The USD went offered across the board and EUR/USD hit a 1.3407 high. Offers ahead of the 21-DMA and Asian sellers near 1.3410 prevented further gains. US bond yields remained heavy but the USD managed to bounce back from its NY lows. EUR/USD slid and gave up all the gains made in early NY. The slide persisted into the afternoon and the pair sat just above 1.3665 late in the day. The pair continues is recent consolidation above 1.3295/1.3325 support. This should encourage bears as consolidation typically resolves in the direction from which the phase was entered. Most of Europe is on holiday tomorrow so traders look to UK GDP and US data for directional cues. A break of 1.3295 opens the door to the September 2013 low near 1.3100.
EUR/USD Europe tried to run the pair through the August 12 low but failed as profit taking from s-t macros halted the drop and a low of 1.3342 was hit. The subsequent bounce had the pair near 1.3365 into NY's open and the US retail sales data. No silver lining could be found in the miss to the sales data. This buoyed the recent tip by Yellen & co. that US rates won't be rising too soon in order to avoid harming the US econ. The USD dived down across the board. EUR/USD spike to a 1.3416 high. No further gains were possible though. European RM names and intra-day profit taking stalled the lift. The USD mounted a comeback and all the post-sales gains eroded. EUR/USD dipped to 1.3355 before a bounce in the afternoon had it settle the day just above 1.3365. Trades now look to the EZ HICP final and GDP reports. Should the data come in below expectations EUR/USD is likely to make a serious attempt at taking out 1.3295/1.3325 support. Weak data may prompt added action from the ECB beyond the TLTRO [ID:nIFR9zTqTl]. A break below 1.3295 then eyes support near 1.3100.
EUR/USD The weak German ZEW data sent EUR/USD to a low of 1.3336 just ahead of NY's open. Profit taking by intra-day names and bids ahead of the 1.3325 barrier stalled the slide. Early NY action saw the USD weak as a large US name was a noted seller of USDs across the board. EUR/USD lifted away from the low and steadily ascended throughout NY's session. The pair couldn't break hourly resistance in the 1.3375/85 zone and it sat just below 1.3370 late in the day. Downside risks remain for the pair as the 21-DMA exerts pressure and price holds below the 200-WMA. RSIs have rolled over again and recent yield compression has abated. Data risks may see the pair's slide pick up speed. Final readings for July HICP and US retail sales data are due tomorrow while Q2 EZ GDPs are due Thursday. Particular attention will be paid to the German components of those data points If Germany is weaker than expected we may see the down trend resume and 1.3295/1.3325 support cleared. The door then opens for a test of the September 2013 low (1.3105).
EUR/USD Traders largely ignored Stanley Fischer's first speech as a Fed member where he leaned dovish. They instead focused on the firm USD and early lift in US bond yields. Although action was limited in EUR/USD it did remain on the heavy side for the European and NY sessions. The pair was pushed from just above 1.3400 in Europe & hit a session low of 1.3381 in NY. EUR/USD sat just above the day's low late in the session even as US bond yields gave up earlier gains. The lift from last week's low may still have legs though as the market has its largest net EUR short position in 2 years (CFTC). Recent shorts have little to show for their efforts though and they may need to cover soon as data risks are coming. Tuesday brings German and EZ August ZEW reports, Wednesday brings numerous EZ CPI reports and Thursday is Q2 GDP for the EZ and Germany. Should these data points surprise with a good showing, a squeeze might be in the making. Resistance sits near 1.3435/45 with stops beginning near 1.3470. If the stops are run the pair may make a run for the 1.3550 area where the 55-DMA and July 21 high sit.
EUR/USD The sour risk brought on by the US air strike news couldn't gain traction in Europe's morning. Right out of the gate the pair lifted from below 1.3360 & hit 1.3408. EUR/USD dipped back below 1.3380 & sat sub-200-HMA into NY's open. Risk sentiment improved further as equity markets were set to open higher & JPY weakened further. EUR/USD held near 1.3395 in early NY but short covering by bears frustrated that Draghi's jawboning failed to sustain a drop ignited a run on stops above 1.3410. The run quickly hit a 1.3433 high. Aiding the lift was EUR/JPY's break of 136.65/70 on it's way to a 136.89 high. EUR/USD pulled back a bit from its high but reports that Russian military drills near Ukraine were over aided to keep the pair solidly in the green on the day. The pair sat just above 1.3410 late in the day. Techs suggest shorts might get squeezed further. Daily RSI is biased up & long lower wicks on the last two weekly candles suggests bulls are putting up a fight. The lift may resume early next week but EZ July CPI & German Q2 GDP data may stall the lift if they come in below estimates.
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