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EUR/USD Firm Into Europe Despite Trump Bruising Risk Outlook

EUR
MNI (London)
  • USD pared late Tuesday Europe morning losses through the US session.
  • EUR/USD touched $1.2257 into NY before dropping to $1.2161 into the 1600GMT fix, extending slippage to $1.2252 in post fix trade before closing around $1.2265.
  • An adjustment in risk outlook was seen as the driving force, market taking its lead from an easing in US equities.
  • Risk returned to mild favour into Asia, which in turn placed renewed pressure on the USD, allowed EUR/USD to edge to $1.2288.
  • US Trump tweet that he will ask for an amendment in the COVID relief bill, calls the $600 payment to US workers a disgrace, asks for $2,000 (2024 election ploy if he can get his signature on the checks?), Democrats support the idea, their focus on the Georgia Senate vote Jan5, bruised the early risk outlook and pressed EUR/USD down to $1.2154.
  • However, risk/equities corrected the react move with EUR/USD able to edge to $1.2192, holding around $1.2185 into Europe.
  • Support into $1.2150 ahead of $1.2130 and $1.2100. Resistance $1.2200/05, $1.2220, $1.2250/60, $1.2272/73.
  • Markets thin as we approach the Christmas break(many European centres will be closed Christmas Eve Thursday) but event risk could prompt volatile conditions.
  • US data in focus, Weekly Jobless Claims, PCE, Pers.Income/Spending, Durable Goods, New Home Sales., and UofM (final)
  • MNI Techs: Underlying bullish conditions remain intact. However, daily trend condition is overbought and suggests the pair is due a correction. If correct, signals scope for weakness towards 1.2109, the 20-day EMA that lies just below trendline support at 1.2133, drawn off the Nov 4 low. A break would be bearish. 1.2273 is the bull trigger.
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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