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EUR/USD Retains Heavy Feel as FOMC Moves into Focus

EUR
MNI (London)
  • Weekend/pre FOMC position adjustments cited for the recovery in the USD Friday, with risk outlook remaining buoyant as seen via equities.
  • EUR/USD reversed away from its Friday high of $1.2193 (charts suggest sell interest seen through the 0800BST fix) to a low of $1.2093(61.8% $1.1986-1.2266) at the 1600BST fix.
  • Rate recovered to $1.2111, closing the week around $1.2109.
  • Australia (Queen's birthday), China, HK, Taiwan (Dragon Boat Festival) market closures led to a fairly subdued Asian session.
  • EUR/USD marked an opening high of $1.2116 before rate drifted lower through the holiday thinned session to $1.2095, seen mainly influenced by reported demand for USD/JPY.
  • Support remains at $1.2093 ahead of $1.2071(May14 low) with stronger interest seen into $1.2052/51(May13 low, 76.4% 1.1986-1.2266/38.2% 1.1704-1.2266). Base of the 1.0% 10-dma envelope currently comes through at $1.2042 which the rate tends to respect.
  • Resistance $1.2116/18 ahead of $1.2130/40 and $1.2170.
  • EZ IP 0900GMT. ECB Schnabel speaks at 1300GMT.
  • US FOMC/Fed Powell press conference Jun16. No rate change expected with taper talk in focus.
  • MNI Techs: EURUSD ended last week on a soft note. The pair traded lower Friday, breaching initial support at 1.2111, the 50-day EMA and 1.2104, Jun 4 low. The break lower signals scope for a deeper short-term correction and an extension would expose the next firm support at 1.2052, May 13 low with the 100-dma at 1.2043. On the upside, initial firm resistance is seen at 1.2218, Jun 9 high. A break would ease the bearish threat.
MNI London Bureau | +44 203-586-2231 | john.webb@marketnews.com
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MNI London Bureau | +44 203-586-2231 | john.webb@marketnews.com
BulletMarketsForeign Exchange BulletsHomepage

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