EUR Trading Outlook
EUR/USD Europe squeezed shorts a bit in their morning as they bounced the pair off the 1.2900 area towards 1.2940 before it pulled back near 1.2920 into NY's open. The USD was soft in early NY and weakened further after jobless claims were worse than f/c. EUR/USD again lifted towards 1.2940. IT broke Europe's high and cleared Asian offers sitting 1.2940/50 to make a 1.2952 high. No further gains could be made as more solid offering interest sat into 1.2960 as the market is firmly in sell rally mode. The USD mounted a comeback and EUR/USD slipped from the high. Pressure also came from BNP's lowered year-end EUR/USD f/c to 1.2500 while also noting they have re-entered a short position to target 1.2500. A dip to 1.2920 saw a slight bounce & the pair sat just above 1.2930 late in the day. The pair continues to consolidate recent losses and this bodes well for shorts. The consolidation phase gives oversold techs a chance to unwind. The phase should resolve to the downside once complete. 1..2740 is the immediate target upon resumption of the down trend
EUR/USD Bears were squeezed in Europe as EUR/USD matched the Sep 8 high (1.2963). The effects of the squeeze faded into NY's open & sat near 1.2950. The USD was generally bid in early NY and bears erased most of Europe's rally. Further pressure came after a DJN story ran stating the SNB was open to negative rates. While EUR/CHF spiked up to 1.2119, EUR was sold heavily vs. the other major currencies. EUR/USD slid to a 1.2883 low, EUR/GBP dipped below 0.8000 & EUR/AUD tested near 1.4075/80.EUR/USD tried to rebound above 1.2920 but couldn't as GBP rallied to 1.6231. This pushed EUR/GBP to a new day low of 0.7954 and saw EUR/USD dip back near 1.2900 late in the session. Traders now look to consumer inflation reports from Germany and France tomorrow. The data could have added impact after ECB's Mersch noted that QE style govt bond buys would only come under two conditions with one of them being inflation remaining at current low levels for too long. Weak CPIs may see 1.2850 break & the door to 1.2740 open.
EUR/USD opened NYC 1.2889, chopped 1.2874/1.2908 for a while with stealth real money offers sating demand out of Europe for a while. A reserve manager came in, started lifting EUR/CAD, sparked some macro buying in EUR/AUD and a general liquidation of short EUR/ commodity bloc currency posis. EUR/GBP and EUR/JPY were also well bid albeit Carney comments re an earlier BoE rate hike than f/c Sterling Briefing stalled the GBP cross. Ahead of the 4.00 PM London fix EUR/USD surged to 1.2919 and after US 10-Yr yields topped out, there was a steady grind higher to 1.2927 NY session highs. EUR/USD closed 1.2926
EUR/USD A tight range held for Asia and Europe and the pair sat just above 1.2950 into NY's open. Some early pressure was put on the pair as it dipped to match the o/n low but no follow through had the market thinking further consolidation would remain. The pair couldn't gains ground back above 1.2950 though as US bond yields firmed and USD/JPY broke above 105.30 and didn't look back until it reached a 106.09 high. EUR/USD bears awoke from their slumber and didn't want to miss an opportunity. The overnight low was broken and the pair then cleared last week's low. Stops below 1.2920 were run. This lead to the pair making easy work of the 1.2900 level. Bears pushed the pair to a new trend low of 1.2882 before a bounce had the pair just above e1.2905 late in the day. A test of 1.2740/90 support is likely now that 1.2900 has been cleared. L-T charts show little support until that level while weekly RSI still is biased down and DE-US yield spreads continue to go further in the USD's favor. There is no major data overnight so there is a possibility that stretched positioning may allow the pair to bounce before the l-t bear trend resumes.
EUR/USD Tight ranges held in Europe as the pair consolidated losses before the US jobs report. EUR/USD sat ~1.2950 pre-data. The NFP missed as only 142k jobs were created vs. 225k f/c . US yields slipped and the USD dropped across the board. Model accounts covered short EUR/USD positions a 1.2990 high was hit. Offers into 1.3000 capped & the pair began slipping. Traders began to think the jobs report was likely a one-off blip & won't change the Fed's current course of ending asset buys. RM & sov selling entered the market and the pair dipped back below 1.2950 even as US bond yields weren't far from the day's lows. Late in the day the pair sat just above 1.2955. Next week presents a light data calendar for the US and EZ so consolidation may dominate for the first half of the week. August CPI figures for many EZ nations are due Thursday & Friday and might impact EUR/USD especially if they are below f/c. Technically the outlook remains bearish as the pair closes below the 50% Fib of 1.2042-1.3995 & the late-July 13 low while weekly RSI's bias remains down. A move through 1.2900 opens the door to a test of 1.2740/90 support.
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