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EUR/USD Knocked Off Highs as UST Yields Remain in Control

EUR
MNI (London)
  • No major surprise from the ECB Thursday which provided for only a limited market response. EUR/USD had pushed up to $1.1973 as ECB left rates unchanged(as expected) then dipped to $1.1928 as Lagarde comments were seen dovish(again as expected), but rate was able to rally back to $1.1990 into the US 30-yr auction.
  • Auction provided little to disappoint which kept UST yields contained.
  • Early Asia consolidated Thursday's recovery between $1.1980/88 USD short covering acted to press rate lower, finding initial support at $1.1960.
  • A sharp rise in UST yields ahead of the Europe open has seen rate extend the corrective pullback to $1.1948.
  • Support $1.1931/28(38.2% 1.1836-1.1990/NY low Mar11), with area between $1.1925-30 holding the strikes of E1.3bln of option expiries for today's NY cut. Below and support then seen at $1.1916/13, $1.1900.
  • Resistance $1.1990/1.2000, the $1.1995-1.2000 area holding E2.56bln of expiries, E2.3bln of EUR puts. Above and $1.2007(61.8% 1.2113-1.1836) provides next resistance ahead of $1.2040/50.
  • Germany CPI 0700GMT, EZ IP 1000GMT. US PPI 1330GMT, UofM 1500GMT.
  • MNI Techs: This week's EURUSD climb extended Thursday as the short-term correction extends. The break above 1.1952 resistance, Feb 25 high, suggests scope for a stronger short-term corrective recovery. Attention turns to the 20-day EMA that intersects at 1.2024. This year's bear trend however remains intact. A return lower and a breach of 1.1836, Mar 9 low is required to resume the downtrend.
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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