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Above $1.22. Technical Uptrend Seen Back on Track

EUR
MNI (London)
  • EUR/USD extended its recent recovery to $1.2212 in early Europe trade Wednesday, as market reacted to release of better than forecast PMI data sets, only to drift off to $1.2163 on position adjustment ahead of the FOMC monetary policy announcement.
  • Initial FOMC react saw rate drop to $1.2125 (MNI: The Fed left benchmark rates near zero and committed to buy at least $120 bln a month of debt until economic recovery makes "substantial further progress," declining to ease further by boosting purchases or shifting them toward the longer end of the yield curve.
  • The initial hawkish react was quickly faded as Fed Powell indicated that the pace and maturity of buying could increase if the economy deteriorates.
  • Rate recovered to $1.2200 into the close, finding late support above $1.2180.
  • Early Asia eased rate to $1.2190 before strong data reacts in AUD and NZD helped EUR/USD break back above $1.2200 then step its way to a fresh YTD high of $1.2235, settling above $1.2220 through to the Europe open.
  • France Confidence data (0745GMT), EZ CPI 1000GMT provides domestic data interest. US Jobless Claims, Housing Starts/Permits and Phila Fed the afternoon interest.
  • ECB speakers Stournaras, Schnabel, Guindos through the afternoon.
  • Support seen at $1.2220, $1.2200, $1.2180. Resistance $1.2235, $1.2250/60.
  • MNI Techs: EURUSD traded higher Wednesday clearing resistance at 1.2178, Dec 4 high. Pair firmer again today. Break brings to an end the recent period of consolidation and marks a resumption of the underlying uptrend. With bullish conditions intact, attention turns to the next objective of 1.2259, a Fibonacci projection. Price has remained above key support at 1.2059, Dec 10 low. A break is required to signal a reversal. 1.2178 marks initial support.
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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