EUR Trading Outlook
EUR/USD opened NYC 1.3613, -15 pips vs last night's close, O/N range 1.3611/42. O/N price action saw EUR/GBP selling at the fixes & after a shift in UK mortgage rules. Positioning was the primary factor that drove EUR/USD to global session lows. Spec buyers long from the bounce after US GDP yesterday owned them between 1.3626-51and needed another soft US data set. US PCE/PI was pretty much a Goldilocks number, close to f/c - strong points (personal income +0.4%) offset by soft real PCE (-0.1%) The Y/Y prices +1.8% were the highest since Oct '12 and sparked long EUR/USD liquidation. Soft EZ stocks added to their woes. Profit-taking in thin liquidity drove prices back up, US traders' eyes on the US/Germany WC game, EUR/USD last 1.3609, US range 1.3576/1.3618.
EUR/USD opened NYC 1.3604, "unch" vs last night's close, O/N range 1.3601/19. Profit-taking in EUR/GBP pulled EUR higher overnight but ranges remained tight. US GDP data was not expected to generate much of a stir but the massive downgrade TO -2.9% sparked a stop loss jag in EUR/USD. GDP to 1.3651 paid and bid. US 10-Yr yields dropped 5bp, -1.0% US durable goods vs "0" f/c aiding and abetting. Non-defence ex- aircraft at +0.7% however was a beat (f/c +0.5%) and there were small upgrades to previous. Furthermore health care spending impacted the numbers. Better than f/c Markit flash composite & Svcs PMIs helped turn bond yields up and by the close were just 1.3bp below the open. EUR/USD closed 1.3629.
EUR/USD opened NYC 1.3620/25, approx 20 pips up vs last night's close, O/N range 1.3593/1.3628. Soft German IFO, differences between the UK & EU ahead of the weekend European summit and rising support for an easing in the EZ's austerity approach weighed on EUR/USD in the NYC session. Algos and ACB offers c 1.3625 capped the topside and left the market seeking flow direction that was not forthcoming. NY traders pressed the downside as London longs scrambled out at their close. Italy's Renzi wants to adjust the austerity focus and France's Hollande also seeks a growth promotion focus. EUR/USD NY range 1.3583/27, closed the session -20 pips circa 1.3600.
EUR/USD opened NYC 1.3586, -15 pips vs Friday night's close, O/N range 1.3574/1.3614. Soft French PMI undermined the EZ average and dropped EUR/USD to O/N lows. NYC traders had little risk appetite and were content to trade inside Europe's ranges, 1.3581/1.3604. A plethora of ECB speakers overnight alluded to various QE approaches they may take and basically justified the next actions if and when they are taken. US data was perkier, the Markit PMI at 57.5 vs 56.5 f/c a stark difference to France's sub- par performance. US existing home sales +4.9% vs +2.2% f/c gave the buck a boost but couldn't stick, EUR/CAD sales from H/Fs and macro funds putting a lid on EUR/USD. Even a reference from ECB's Nowotny that part of the ECB's policy objectives is to limit EUR strength got limited airplay [ID:nIFRccV60d] The German IFO is due tomorrow alongside Swiss trade & Italian wages & trade data. Also, a slew of US housing data, consumer confidence and Richmond Fed idx.
EUR/USD Offers from ACBs and spec into 1.3650 were once again too much to overcome. Europe pushed EUR/USD from its 1.3634 high(aided by EUR/GBP's slide to 0.7969) and it sat near 1.3695 into NY's open. Pressure remained on the pair in early NY as US yields and the USD were rising. Further pressure was added after Canada's CPI & retail sales data were above f/c. EUR/CAD had been heavy o/n but after the data it plunged from near 1.4710 towards 1.4585/90. This dragged EUR/USD down and it hit a low of 1.3565. A pause in the USD's ascent and some give back for US bond yield gains allowed for a bounce. The pair lifted through NY's afternoon and sat just above 1.3590 late in the day. Consolidation remains the dominant theme for EUR/USD. The phase is taking place near recent lows and should eventually resolve in favor of bears. A break of 1.3500 and the Feb low should open the door a 1.3300 test. Bulls need to retake ground above 1.3675/80 to alleviate the immediate downward pressure.
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