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EUR/USD Holds Above $1.1900 in Europe, ECB and US 10-Yr Auction in Focus

EUR
MNI (London)
  • Risk outlook continued to improve Wednesday, allowed EUR/USD to extend its recovery away from Tuesday's low of $1.1836, initially to $1.1925 in early NY(react to US CPI release) before extending move further to $1.1930 in post US 10-yr note auction trade.
  • US CPI came in at 0.1%mm (forecast 0.2%), whilst the 10-yr auction didn't produce any negative surprises (attention now switches to today's 30-yr auction 1800GMT).
  • Biden's $1.9bln stimulus to be signed into Friday, following passage through the House of Representatives, and notice that US officials to meet Chinese counterparts, added to the improved risk outlook.
  • EUR/USD marked a low at $1.1916 in early Tokyo before EUR/JPY demand provided the upside push to take it to an extended high of $1.1934 before momentum faded, though pullback restricted to $1.1926 ahead of the European open.
  • ECB monetary policy announcement at 1245GMT, no change widely expected, more attention on ECB Lagarde's press conference at 1330GMT.
  • MNI preview: ECB unlikely to make any material changes to the monetary policy stance. However, meeting will be closely watched for indications of how the ECB will respond to the recent rise in nominal yields.
  • EUR/USD support $1.1916, $1.1900, a break to expose the Mar10 low at $1.1869, the base of the 1.0% 10-dma envelope close behind at $1.1837
  • Resistance $1.1835 ahead of $1.1842/52(38.2% $1.2113-1.1836/Feb05 low), $1.1970/80, stronger into $1.2000.
  • US Weekly jobless claims 1330GMT, US 30-yr auction 1800GMT.
  • MNI Techs: EURUSD outlook remains bearish despite this week's corrective recovery. The recent break of key support at $1.1952, Feb 25 low still weighs on the pair. The move confirmed a resumption of the downtrend that started February 6. Attention is on the 200-dma, currently at $1.1832 ahead of the $1.1800 handle, Nov 23 low. Initial resistance is seen at 1.1952, the recent breakout level. A break would signal scope for a stronger correction.
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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