Break and Close Below 55-dma Adds Weight

Close below the 55-dma at $1.1732 Tuesday added to the unfolding negative picture for EUR/USD, the move driven mainly by general USD strength on the back of firmer UST yields and some noted buy the dip buoyancy in US equities. Traders also reacted to Tuesday's hawkish comments from Fed Evans. Rate touched a low of $1.1692, holding off the mentioned focus $1.1690 level, before closing the day around $1.1710. Tokyo return after a 4-day weekend saw fresh USD demand emerge, helped in part by the passing of a bi-partisan stop gap funding bill (as well as Sunday's Goto-bi day date) which provided the weight to take EUR/USD through $1.1690 to a low of $1.1675. Was mentioned Tuesday that market still saw potential in buying dips but a break of $1.1690 could begin to change this outlook. Support currently seen into $1.1675/70, a break to expose the $1.1640 area ($1.1639 Jul27 low), with some highlighting $1.1581(Jul24 low). Resistance now seen into $1.1720, the 55-dma having now moved up to $1.1737. Flash PMI releases in the EZ provides main focus this morning, these data often provides decent market react. Flash PMI data also due from the US. ECB de Cos speaks at 1100BST. Fed speakers include Mester(hawk), Powell(dove), Evans(dove, nv), Rosengren(hawk, nv), Kashkari(dove), Bostic(neutral, nv), Quarles(neutral) and Daly(dove, nv).