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EUR/USD Opens Europe Buoyant But Encountering Headwinds

EUR
MNI (London)
  • EUR/USD extended its recovery off the Jan18 YTD low of $1.2054 in European morning trade Friday to $1.2190.
  • Into the weekend and USD shorts were trimmed which saw rate slip back to $1.2154 in NY, recovered to $1.2185 before it settled around $1.2170 through to the close.
  • Early Asia continued this late Friday consolidation though managed to mark a low of $1.2160 before rate pushed up to $1.2183 on general risk appetite, though move met some counter from EUR/GBP sales.
  • Support $1.2160/50, $1.2130 ahead of stronger interest into $1.2100.
  • Resistance $1.2185/90, $1.2200/10, $1.2223/36(Jan13 high/61.8% $1.2349-1.2054).
  • ECB Lagarde speaks at 0845GMT ahead of Germany Ifo at 0900GMT. ECB Panetta(1045GMT), Lane(1345GMT), Elderson(1345GMT) before Lagarde reappearance at 1600GMT(at virtual Davos).
  • Vaccine rollout concerns, Italy politics could provide some counter to EUR gains on risk outlook. Focus also on US Biden's COVID relief plan, FOMC Wednesday.
  • MNI Techs: EURUSD is holding onto last week's gains and testing the 20-day EMA at 1.2165. Last week's recovery is seen as a pause in the current bearish cycle and further S/T weakness is likely with the pair still in a corrective phase. 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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