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EUR/USD Meets Early Europe Headwinds

EUR
MNI (London)
  • Recovery off last Friday's low of $1.2054 given a boost Thursday by ECB Lagarde's comments, mildly optimistic, seeing downside risks less pronounced, which along with a written response by Janet Yellen in which she reiterated preference for fair and free global currency valuations, took EUR/USD up to $1.2173.
  • Rate eased to $1.2136 before it recovered to $1.2170 into the close.
  • Asia extended the recovery to $1.2178 into Tokyo, dipped to $1.2162 then settled around $1.2175 for the main part of the session.
  • Early sales into Europe sees rate trade around $1.2168.
  • Support now seen at $1.2162/58 ahead of $1.2135/30, $1.2115/00, $1.2077.
  • Resistance $1.2178/83(76.4% $1.2223-1.2054) a break to expose resistance around $1.2200($1.2202 50% $1.2349-1.2054)
  • Flash PMI's France, Germany and EZ(0815-0900GMT provides domestic interest alongside ECB Survey of Professional forecasters(0900GMT).
  • US PMI and Existing Home Sales provide afternoon interest.
  • MNI Techs: EURUSD is firmer and testing the 20-day EMA at 1.2165. This week's recovery is seen as a pause in the current down leg and further short-term weakness is likely with the pair still in a corrective bearish cycle. This follows the recent sell-off from 1.2349, Jan 6 high. A resumption of weakness would open 1.2011, Sep 1 high next and 1.1976, a Fibonacci retracement. Above the 20-day EMA, 1.2230 marks a firm resistance, Jan 11 high.
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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