EUR Trading Outlook
EUR/USD Weak econ data from France & Italy added to concerns over EZ banks and rising EZ peripheral bond yields. Bears pushed EUR/USD from Europe's 1.3651 high and had it near 1.3625 as NY got going. NY added pressure right out of the gate. The appetite for safe haves grew in early NY. US bond yields sank while the USD and the JPY were well bid. The pair pierced the 21-DMA and hit a low of 1.3589. Aiding the slide was US equity mkts opening near their lows. Macro bids in the 1.3580/85 area aided to stem the slide. After a second attempt to break to new lows failed a small bounce ensued and the pair sat just above 1.3600 late in the day. A EUR/JPY rally near 137.90, driven by a recovery in US equity mkts and bond yields, aided EUR/USD's late day lift. The pair still remained down near 0.30% for the day though and the technical picture has grown a bit more bearish. Daily RSI has rolled over, a bearish outside day candle is in place, the 55-DMA is crossing below the 200-DMA & the daily cloud base has slipped below 1.3670. This may result in a test of June's low in the near future.
EUR/USD Offers into the 200-HMA and 1.3640/50 zone saw Europe smash EUR/USD lower from the 1.3631 level & have it sitting just above 1.3600 into NY's open. Early action was limited but the pair looked set to make further losses as US yields and the USD were generally firm. Lower levels were not to be though. EUR caught a bid in the crosses, especially vs. JPY, AUD & GBP) and began rallying. The 200-HMA was cleared and 1.3640 breached but the gains fades as US yields held firm and the Fed minutes were due. A drift lower had the pair near 1.3625 into the minutes. A quick spike lower off the tip to ending QE in Oct. if econ conditions could support the cut saw EUR/USD test near 1.3610. The slide reversed though as there seemed to be no mention of rate hikes in the minutes. Broad based USD sales by CTAs aided EUR/USD's lift. The earlier high was cleared and a new high of 1.3648 was set. Draghi spoke and gave lip service to a lower EUR but it had no effect. Little pullback was seen & EUR/USD sat near the high late in the day. Traders look to China's trade data & BoJ later for their next cues.
EUR/USD Europe aided a short-term recovery for the pair as they walked in with the pair just above the late-June lows. The lift had the pair just below 1.3600 into NY's open. Speculation of reserve manager diversification and noted corporate buying were the main drivers for the lift. Early NY saw a small dip but a CB buyer emerged and pushed the pair back above 1.3600. Soft US bond yields and a generally weak USD allowed for further small gains. A high of 1.3609 was hit. Little pullback was seen and the pair sat just below the high late in the day. There is little in the way of economic data this week for the EZ and US. This may see the pair linger within recent ranges and any EUR/USD moves are likely to take direction from the crosses.
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FRIDAY, JULY 4, 2014
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