EUR Trading Outlook
EUR/USD Below f/c Dec Ez CPI weighed in Europe. Further weight came from USD strength. This saw EUR/USD slide from 1.1897 towards 1.1820 into NY's open. An early bounce met sellers as US bond yield recouped some Jan 6 losses & the USD held its bid early on. EUR/USD slid lower and hit a new trend low of 1.182. Option related bids halted the slide and the abating of the USD's rise saw some short covering take hold. The pair lifted towards 1.1835 pre-FOMC minutes. The minutes were a bit mixed with the initial reaction being USD bullish. EUR/USD dived down to 1.1808. The move quickly reversed though as the Fed noted that further deterioration in foreign economic situations could lead to issues for the domestic econ. The market took this as a bit dovish. EUR/USD rallied near 1.1855/60. Very little pullback from that spike high was seen as the pair sat just below 1.1855 late in the day. The new trend low keeps the l-t outlook bearish and the market still wants to sell rallies pre-ECB. Offers remain into 1.1900 and 1.1950 for now.
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