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EUR/USD Support into $1.1700 but Y111.00 Holds Key to Direction

EUR
MNI (London)
  • Risk aversion, higher UST yields and month-end flows all acted to boost the USD through Tuesday's session, pressed EUR/USD to a low of $1.1712. Rate managed to edge back to $1.1733 through the 1600BST fix before it settled around $1.1720 into the close.
  • Rate edged to $1.1726 in early Asia before it turned lower again as strong USD demand was seen at Tokyo fixes (USD/JPY driven higher with demand also seen for JPY crosses). This interest acted to press EUR/USD to an extended low of $1.1704.
  • Rate met decent demand ahead of $1.1700 prompting suggestions that the level holds option barrier interest (no confirmation).
  • Similar day to Tuesday with market watching another big figure level in USD/JPY, this time Y111.00 (yesterday was Y110.00). A break here to dictate next direction.
  • EUR/USD technical support $1.1695(38.2% $1.0636-1.2349), break of $1.1690 to open a deeper move toward $1.1680 ahead of $1.1650. Resistance $1.1745/55, $1.1775/85.
  • Germany Unemployment 0755GMT, EZ flash CPI 0900GMT provide morning domestic data interest. US ADP Employment 1215GMT(ahead of Friday NFP), US Home Sales data 1400GMT. ECB Villeroy speaks at 1300GMT.
  • Month-end flows, UST yields dominate direction. US Biden speaks today, outlining economic plan. Washington Post suggests package of $2.25tln, additional $1.5tln for enhanced child tax credit. Taxes to fund. Plan expected to face opposition from both sides.
  • MNI Techs: EURUSD remained under pressure Tuesday and has eased again today. This week's move lower has resulted in a break of support at 1.1752, 1.236 of the Jan 6 - Feb 5 - Feb 25 price swing. The move lower reinforces current bearish conditions and paves the way for an extension lower towards 1.1694, a Fibonacci projection. On the upside, initial firm resistance is seen at 1.1805, the Mar 26 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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