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EUR/USD Knocked back on UST Yields, NFP Position Adjustment

EUR
MNI (London)
  • Rising UST yields cited for the current short USD squeeze with EUR/USD able to extend its corrective pullback, away from Wednesday's high of $1.2349(YTD high), to $1.2245 with recovery efforts basically capped around the $1.2280 level into the close.
  • USD demand resumed in Asia, led by demand for USD/JPY, and acted to press rate to a fresh pullback low of $1.2235.
  • However, the corrective easing in JPY saw EUR/JPY buoyed which in turn provided some support for EUR/USD, allowing it to recover to $1.2268 ahead of the European open.
  • Market was seen short USD's into 2021 with current squeeze given some added weight by position adjustments into this afternoon's key US Employment Report (Median NFP 50k vs last 245k).
  • Support $1.2235(Asia low, falling trend support Jan06) ahead of $1.2220, stronger into $1.2200. Resistance $1.2280/85, $1.2300, $1.2320.
  • Traders note that close to E6.0bln of EUR puts roll off at Monday's NY cut with strikes set between $1.2295-1.2315.
  • Germany IP, Trade, C/A released at 0700GMT, France IP, Trade and Consumer spending at 0745GMT. EZ Unemployment at 1000GMT. Morning data seen as a curtain raiser ahead of US NFP. FED Clarida speaks at 1600GMT.
  • US Politics to be watched, Pelosi calling on VP Pence to use 25th Amendment to remove Trump, threatening impeachment if the VP doesn't act (If Trump removed Pence then to grant him a pardon?).
  • MNI Techs: EURUSD maintains a bullish tone despite the pullback Thursday. This week's gains to a high of 1.2349 reinforce underlying bullish conditions. Recently, we highlighted that the daily trend condition is overbought and that this suggests the pair is due a correction. The continued move higher though places a correction on hold for now. Scope is seen for a climb to 1.2353, Apr 20, 2018 high ahead of 1.2380, a Fibonacci projection. 1.2209 marks support.
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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