MNI China Daily Summary: Tuesday, June 11

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Bearish Tone Remains, Focus on $1.1800 Support

EUR
MNI (London)
  • Risk aversion continued to drive markets Wednesday, the USD the main beneficiary.
  • EUR/USD squeezed to an extended low of $1.1810 ahead of the close with early Asia consolidating the move ahead of the Tokyo open.
  • Rate pressed to a low of $1.1804 but ran into decent demand prompting some to suggest that the $1.1800 holds option barrier interest (no confirmation), the level does hold the strike of an expiring option for today's NY cut for E1.56bln.
  • EUR/JPY demand emerged which allowed rate to edge to $1.1828 before it settled back around $1.1820, eased to $1.1814 ahead of the European open.
  • Support remains into $1.1800, a break to expose the base of the 1.0% 10-dma envelope, currently at $1.1780, with $1.1779 corresponding to a 76.4% retracement of the $1.1603-1.2349 recovery. 1.618% swing projections noted lower down at $1.1772 and $1.1741.
  • Resistance $1.1828/36, a break of $1.1855/75 ($1.1866 200-dma) seen needed to relieve current downside pressure.
  • Germany GfK 0700GMT, EZ M3, ECB Economic Bulletin and ECB Lagarde, Weidmann, Villeroy at BIS conference at 0900GMT. Fed Williams will make remarks at same conference at 0930GMT. ECB Scnabel and Guindos speak at 1700GMT.
  • US Jobless Claims, GDP, PCE 1230GMT. Fed Clarida 1410GMT, Bostic 1600GMT, Evans 1700GMT, Daly 2300GMT.
  • MNI Techs: A bearish theme remains intact and strengthened yesterday's break of key short-term support at 1.1836, Mar 9 low. Note, the 200-day MA has also this week been breached. This confirms a resumption of this year's downtrend and sets the scene for an extension lower, opening 1.1800 next, Nov 23 low. Initial firm resistance is at 1.1947, the Mar 22 high.
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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