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E1.2220/30 Provides Next Upside Hurdle

EUR
MNI (London)
  • Recovery off the NY low of $1.2137 extended to $1.2210, closing the day at $1.2208.
  • The recovery extended in Asia to $1.2220 before it met decent headwind resistance, though pullbacks were contained around $1.2210, maintaining the break above $1.2200.
  • Fed speak Tuesday countered recent speculation of Fed tapering, pushing the prospects for this into 2022. The recent USD recovery quickly faded on the dovish rhetoric.
  • EZ IP provides the morning data focus at 1000GMT. ECB Villeroy speaks at 0830GMT, Lagarde at 0900GMT. Into the afternoon and focus turns to US CPI. Fed Bullard speaks at 1430GMT.
  • EUR/USD support seen into $1.2200 ahead of $1.2180, stronger into $1.2140/30. Resistance $1.2220/30, a break to expose retracement levels at $1.2241, $1.2266 and $1.2279 (50%-61.8%-76.4% respectively).
  • Noticeable that the recovery in EUR/USD appears to be lagging other G-10 pairs.
  • Nothing stand out on the option expiry front today, focus on Jan19 with close to E5bln of EUR puts rolling off with strikes set between $1.2190/1.2210.
  • MNI Techs: EURUSD remains vulnerable despite yesterday's recovery. The recent move lower has signals the start of a much needed correction allowing a recent overbought condition to unwind. Price action has this week traded through the 20-day EMA and this exposes support at 1.2130, the Dec 21 low. A breach here would open the 50-day EMA at 1.2090. On the upside, 1.2230 marks initial resistance, Jan 11 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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