EUR Trading Outlook
EUR/USD The pair saw short covering in Europe test the 1.1450/60 resistance zone but be unable to break it. The ensuing dip had it near 1.1425 into NY's open. Early action saw the slide deepen towards 1.1390 after weekly jobless claims came in much better than f/c. The dip was bought though and a steady ascent towards Europe's high took hold. The zone held several tests but the dips became more and more shallow. Headlines from Greek's CB Gov Stournaras noted the ECB collateral decision can be taken back if a deal is reached with EU partners buoyed risk sentiment. JPY weakened drastically and EUR/JPY rallied near 135.15. EUR/USD went along for the ride and ran stops above 1.1460. A quick spike took hold and 1.1499 was hit. Offers at hourly resistance and into the 21-DMA (1.1510) capped the gains. The pair slid a bit late in the day and sat just above 1.1475 towards the close. Traders now wait for the US January jobs report. A weak result likely sees EUR/USD ending its consolidation phase and break higher. We're then likely to see a quick run to 1.1650/80 where the Jan 22 & 21 highs sit.
EUR/USD General USD strength and uncertainty over the Greece situation saw bear pressure applied to EUR/USD in Europe & NY. The pair slipped from the 1.1480 area in Europe & stood near 1.1460 into NY's open. The ADP miss gave no relief for longs as the pair slipped towards 1.1435. The above f/c ISM non-Mfg data saw a boost to US yields and the USD. EUR/USD's slide deepened. A Die Welt story noting the ECB GC was set to back liquidity assistance for Greek banks allowed a small bounced. Comments from EU's Schulz stating Greece's Govt has no choice but to keep if obligations to European partners stymied the bounce. The pair hit a NY low of 1.1399 and saw very little bounce as it sat near 1.1415 late in the day. The pair may be in limbo for now and hold between the 10 and 21-DMas. Traders don't want to get too aggressive ahead of the US jobs data on Friday especially after the vicious moves seen on Feb 3.
EUR/USD caught fire in early NY triggered by an explosion higher in oil prices and a bad miss in US Factory Orders. Shorts were surprised by the steep rise, with many EUR bears who had earlier claimed to be confident sellers never showed up as the pair traded as high as 1.1534. Oil is calling the shots across the marketplace right now (+ >18% from Friday) and tensions are feared to be ratcheting up in the Middle East as Jordan claims they will execute ISIS prisoners previously scheduled for a swap. 1.1650, which was the high on Jan 22, is the new panic spot as the post-ECB move to 1.1100 is coming to be seen as a overreach in an increasingly crowded trade.
EUR/USD Europe rallied the pair towards the Jan 29 high and 10-DMA but failed to breach either. JPY strength weighed on EUR/JPY which aided to cap EUR/USD's lift. The pair slid a bit and sat near 1.1345 into NY's open. Bear pressure remained on the pair and even a below f/c US GDP print gave little relief. The pair's slide extended to 1.1278 as EUR/JPY neared 132.35. An afternoon lift for the USD helped keep the pair near the day's low and it sat just below 1.1300 late in the day. There is little in the way of major EZ data to drive the pair next week so the USD side of the data equation will get the most impact. January ISM mfg and non-mfg as well as the Jan US jobs report will get the markets attention. Should the reports come in weak EUR/USD may see a squeeze. Stops above the Jan 27 high then may be run. If the squeeze persists it's possible a run to the 21-DMA and 1.1650/80 zone could ensue as the market still holds large short positions. Solid US data reports likely see the l-t bear trend go further and the pair make a run at the psychological 1.1000 level..
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