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$1.2350 Becomes Hurdle to Upside Progress

EUR
MNI (London)
  • As the Georgia Senate election results filtered through Wednesday, which began to show a Democrat win (and control of the Senate under a Biden presidency) it provided a boost for risk via market perception that this result to allow for increased fiscal stimulus in the US.
  • EUR/USD extended its recovery, off its early Asia low of $1.2276, to $1.2349 before momentum faded into of the NY open.
  • Profit take sales into NY, prompted as market switched from expected increased stimulus to expected increased regulation and taxation(negative effect on equities), which pressed rate down to $1.2266 into the 1600GMT fix before recovery to $1.2340(reaction to events on Capitol Hill), closing the day at $1.2327.
  • Early Asia reaction to the US Capitol events saw EUR/USD edge to $1.2344, held shy of Wednesday's $1.2349 high. One local trader noted decent two way flow above $1.2338 which prompted suggestions $1.2350 may hold option barrier interest(no confirmation).
  • Failure to push through $1.2350, along with UST yields continuing to tick higher, saw EUR/USD pressed down to $1.2311 into Europe(holding heavy at writing).
  • Support seen at $1.2305/1.2295 ahead of $1.2284(76.4% 1.2266-1.2344) and $1.2266. Resistance $1.2340/50, $1.2370/80, $1.2400.
  • Traders aware that close to E6.0bln of EUR puts roll off Monday with strikes set between $1.2295-1.2315.
  • Germany Factory Orders 0700GMT, EZ CPI, Econ.Confidence, Retail Sales 1000GMT.
  • US Weekly Jobless Claims, Trade. Fed Harker, Barkin, Bullard, Evans, Daly speak.
  • MNI Techs: EURUSD maintains a bullish tone, firmer Wednesday, trading to a high of 1.2349. Recently we highlighted that the daily trend condition is overbought and this suggests the pair is due a correction. The continued move higher though places a correction on hold for now. Resumption of the uptrend signals scope for 1.2353, Apr 20, 2018 high ahead of 1.2380, a Fibonacci projection. Key trend support remains 1.2130, Dec 21 low.
MNI London Bureau | +44 203-586-2231 | john.webb@marketnews.com
BulletMarketsForeign Exchange Bullets
MNI London Bureau | +44 203-586-2231 | john.webb@marketnews.com
BulletMarketsForeign Exchange Bullets

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