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Back Below $1.1900 on Risk Aversion

EUR
MNI (London)
  • EUR/USD recovery off the Mar31 posted YTD low of $1.1704 peaked Thursday at $1.1927 with rate consolidating around $1.1900, within a basic $1.1860/1.1920 range.
  • Friday saw rate dip to $1.1867 following release of strong US PPI data, quickly recovered to $1.1910(data seen skewed by supply chain disruptions) , closed week at $1.1901.
  • Rate opened Asia firm, managed to touch a high of $1.1917 before risk aversion, along with reaction to upbeat Fed Powell comments (interview with CBS), acted to boost the USD, which along with EUR/JPY sales, pressed rate down to $1.1886, holding soft into Europe.
  • ECB Panetta(dove)0745GMT. EZ Retail Sales 0900GMT(median 1.0%mm, -5.3%yy)
  • Support $1.1870/60, break exposes $1.1842(38.2% $1.1704-1.1927) ahead of $1.1816(50%) and $1.1795/89(Apr06 low/61.8%). Resistance $1.1917/27($1.1915-30 holds strikes for E1.4bln of EUR put expiries for today's NY cut) ahead of $1.1940/50.
  • Risk aversion, Alibaba fine (though not as heavy as it could have been), Iran claims 'nuclear terrorism' after Natanz site blackout, COVID vaccine roll out in Europe and growth outlook disparity between US/Europe seen weighing on the EUR and opens currency to renewed EUR funding positions.
  • MNI Techs: EURUSD traded higher last week and is trading closer to recent highs. The pair is once again trading within its bear channel range drawn off this year's Jan 6 high - the channel base was breached in March. Gains are still considered corrective though with the next firm resistance at 1.1939, the 50-day EMA. A clear break of the average would be bullish and signal scope for an extension higher. Initial support is 1.1861, Apr 8 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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