EUR Trading Outlook
EUR/USD The pair was buffeted in the 1.2430/1.2498 range as action in EUR/JPY and EUR/GBP drove the pair.EUR/JPY's descent initially dragged the pair lower but EUR/GBP's lift post-BoE QIR saw the upper limit of the range tested. The pair sat near the mid-point of the range as NY got going. Numerous tries to take EUR/USD higher were thwarted as solid offers into 1.2500 capped. Market speculation that a CB buying EUR/CHF was unloading the EUR vs. the USD. This saw the pair slip back near 1.2450. A bounce off that area was rejected and the overnight lows neared again after ECB's Weidmann noted an expansive monetary policy is appropriate and so is the GCs discussion of additional measures. We saw fresh EUR/USD session lows after DJN reiterated earlier headlines that NATO says Russian convoys have been crossing the Ukraine border raising risks of new sanctions. A break lower will put 1.2240/95 support in play followed by the July 2012 low at 1.2042.
EUR/USD Light short covering took hold in Europe's morning after USD/JPY's rally stalled. EUR/USD lifted from the 1.2400 area towards 1.2420 as NY got going. Early NY saw a slight bid but the pair was hemmed as USD/JPY remained near its highs early in NY and EUR/JPY was firm. The short covering resumed though as the USD saw broad based selling as USD/JPY broke key intra-day supports. EUR/USD broke s-t resistance near 1.2450 and cleared the 200-HMA as well. The pair went on to make a 1.2499 high before sellers emerged. USD/JPY bounced off the 115.00 area and this allowed EUR/USD to slip back towards the 200-HMA. Late in the day the pair say just above 1.2480. There is little in the way of major data overnight that might affect EUR/USD so action might be limited until the US bond market reopens on Wednesday. Big data risk towards the end of the week is likely to keep traders on the sidelines as well. Until then the 1.2355/1.2580 range likely holds.
EUR/USD A lift late in Europe's morning saw the pair test above 1.2500. Asian offers and the 200-HMA were too much to overcome though as the pair halted at 1.2509.The USD's slide initiated Friday began showing some signs of faltering as the market decided the greenback looked a bit cheap. EUR/USD slid from the high and sat near 1.2485 in early NY. Bear pressure was immediately applied in NY as the USD lift accelerated. Hourly support near 1.2470 was tested but it couldn't hold for long. Yields on US bonds reversed course and clawed back much of Friday's losses. EUR/USD broke the support and accelerated lower. A slump in commodity prices likely added to the pair's woes. The pair eventually tested hourly support near 1.2415/20 in NY's afternoon before the slide halted. Very little bounce was seen though as the pair sat just above 1.2420 late in the day. Action may be limited as there is little data due and US celebrates Veterans' Day tomorrow. The pair may remain range bound until European inflation reports on Thursday and German & EZ Q3 GDP and US retail sales data on Friday.
EUR/USD Some USD long unwinds took hold in Europe. EUR/USD lifted from the 1.2375 area to sit just below 1.2400 into the US jobs report. Algos sent EUR/USD on a wild ride after the headline NFP missed forecasts. The pair initially spiked up to 1.2443. Asian sellers capped the move and the pair quickly reversed as the market saw revisions were upbeat. The pair gave back all the gains and the Asian names bought the shorts back near 1.2380. Bear pressure persisted a bit though and a NY low of 1.2358 was hit. US bond yield got hit after the data and their slide deepened. Broad based bear pressure on the USD took hold. EUR/USD made several attempts to clear the reaction high. Several of them failed but the pullbacks became more & more shallow. With US yields unable to mount a comeback a large wave of USD sales hit the market. EUR/USD ran stops above 1.2450 and hit a 1.2470 high. A bounce for the USD saw the pair pullback and it sat near 1.2440 late in the day. there is little data early next week but thing might heat up later as several EZ nations see Oct CPI and the EZ releases Q3 GDP.
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