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EUR/USD Underlying Tone Remains Buoyant

EUR
MNI (London)
  • EUR/USD recovery off its Dec31 pullback low of $1.2209 stretched up to retest the area of recent highs at $1.2309/10 in early NY before momentum faded.
  • A paring of risk positions ahead of today's US Georgia Senate election, with Friday's NFP moving into view, along with a corrective pullback in GBP/USD on expected announcement of another COVID lockdown(announced at 2000GMT last night), saw EUR/USD pressed back to $1.2242, closing the day at $1.2250
  • The USD came under fresh pressure in Asia, though the EUR struggled to take full advantage, edged to $1.2277 in a move that met further profit take headwinds, before it settled around $1.2270 ahead of Europe.
  • Resistance seen at $1.2283/93(61.8%-76.4% 1.2309-1.2242) ahead of stronger interest between $1.2300/10. Support $1.2242, $1.2210/00.
  • Traders note that E1.1bln of $1.2300 EUR puts roll off Wednesday, E2.7bln of EUR puts mature on Monday between $1.2295-1.2300, which could strengthen resistance in this area.
  • Germany Retail Sales 0700GMT, Germany Employment 0855GMT and ECB M3 at 0900GMT provide the morning's data interest. US Redbook, Case-Schiller Home Prices and ISM Mfg provide afternoon data interest. Fed speakers include Evans and Williams.
  • MNI Techs: EURUSD maintains a firmer tone despite pulling back from yesterday's high. We have recently highlighted that the daily trend condition is overbought and this suggests the pair is due a correction. The break higher last week though puts this on hold. The recent resumption of the uptrend signals scope for 1.2353, Apr 20, 2018 high ahead of 1.2366, a Bollinger band ceiling. On the downside key trend support lies at 1.2130, Dec 21 low.
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 Bullets

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