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EUR/USD Firm But Holds Off Recent $1.2177/78 Highs

EUR
MNI (London)
  • EUR/USD retains an impulsive feel though recent rallies fail to apply pressure on recent highs at $1.2177/78(Dec14-Dec04).
  • Positive comment on US fiscal stimulus, along with upbeat feel for a Brexit trade deal aid risk outlook.
  • Asian traders continue to mention resistance at and above $1.2170, a break of $1.2180 to expose $1.2200, some banks having bigger upside calls for year end toward $1.2400.
  • Support provided by rising support, drawn off the Dec09 low of $1.2059, today coming through at $1.2144(Asia low $1.2145). Break to open a deeper pullback toward Tuesday's low of $1.2122.
  • Flash PMI releases from France, Germany and EZ provide morning focus(0815GMT to 0900GMT). EZ Trade and Labour cost data at 1000GMT. US Retail Sales at 1330GMT and flash PMI at 1445GMT provide the curtain raisers to the FOMC at 1900GMT.
  • MNI FOMC preview: FOMC likely to adopt new guidance on asset purchases, but will fall short of adjusting its purchase program in either scope or size, preferring to wait for further clarity over the outlook before taking such a step. While an increase in the weighted average maturity of the Fed's asset purchases is not the consensus outcome from this meeting, it is expected by some market participants – setting up the potential for a hawkish disappointment on Wednesday.
  • ECB speakers Guindos, de Cos and Schnabel.
  • MNI Techs: EURUSD is firmer but still trades below the 1.2178 high from Dec 4. The trend is overbought however, with support at 1.2059 intact, Dec 9 low, there do not appear to be any reversal threats on the horizon. It would take a break of 1.2059 to suggest a near-term top and signal scope for a deeper correction. Until then, bullish conditions remain intact with the focus on 1.2184 next, a Fibonacci projection.
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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