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EUR/USD Back Below $1.1900. Key Levels $1.1832 and $1.1952

EUR
MNI (London)
  • An easing in UST yields at the European open Tuesday prompted a USD corrective pullback, allowed EUR/USD to recover from its earlier Asia posted low of $1.1836 to $1.1916 ahead of the NY open.
  • NY settled between $1.1880/1.1910, closing the day at $1.1901.
  • Traders noted that the rate held shy of its 200-dma (current $1.1832), having held above since May2020.
  • USD retained a relatively soft tone into the close with traders noting Wednesday's vote on the US $1.9tln fiscal package, and likely to be signed into law later today. Risk was also given a boost by the sharp recovery in US tech stocks, whilst UST yields held off highs. 3-yr note auction was positive but focus will switch to longer dated auctions, 10-yr today and 30-yr Thursday.
  • Asia saw a mild recovery in UST yields which in turn pressed EUR/USD down from its early high of $1.1903 back to $1.1869 ahead of the European open.
  • Asian traders suggest support likely to emerge between $1.1860/50 ahead of $1.1836/32 then into $1.1800. Resistance $1.1903, $1.1932 ahead of the Feb05 low of $1.1952.
  • France Ind/Mfg production at 0745GMT.
  • Key focus will be US CPI at 1330GMT, market median 0.4%mm, 1.7%yy/Core 0.2%mm, 1.4%yy. US Monthly Budget Statement at 1900GMT.
  • Thursday ECB meeting approaching. No change in rates widely expected. Focus on press conference and mention of EUR yields.
  • MNI Techs: The EURUSD outlook remains bearish despite yesterday's corrective recovery. The recent break of key support at 1.1952, Feb 25 low still weighs on the pair. This confirmed a resumption of the downtrend that started February 6. Monday's sell-off signals scope for a test of the 200-dma, currently at 1.1829 ahead of the 1.1800 handle, Nov 23 low. Initial resistance is seen at 1.1952, the recent breakout level.
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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