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FOREX: EURUSD Consolidating Above 1.0900, Rabobank Look for 1.1200

FOREX
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  • The EURUSD rally lost steam late Tuesday as markets shrugged off Ukraine agreeing to a 30-day truce and the greenback more broadly recovered. Yesterday’s peak of 1.0947 coincided with the pair completing its recovery to the US election related highs at 1.0937, with the bounce from last week’s lows totalling 5.55%. Spot also substantially narrowed the gap to resistance at 1.0961, the 76.4% retracement of the Sep 25 ‘24 - Feb 3 bear leg.
  • While US CPI will be the significant driver of short-term sentiment, the technical uptrend is overbought, and a pullback would allow this set-up to unwind. Support remains much lower at the prior breakdown point of 1.0668.
  • The EU announced €26bn worth of retaliatory tariffs against the US, however the brief EURUSD dip below 1.0900 has been well supported and the pair has been consolidating above the figure as we approach the data.
  • Waning global risk sentiment in recent weeks has allowed the single currency to also outperform in the crosses, and EURAUD remains a standout here, having extended its 3 week bounce to 6.5% at its peak on Tuesday. An appreciation today would extend an uninterrupted winning streak to 14 sessions.
  • An update of some short-term EURUSD analyst views to follow.
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  • The EURUSD rally lost steam late Tuesday as markets shrugged off Ukraine agreeing to a 30-day truce and the greenback more broadly recovered. Yesterday’s peak of 1.0947 coincided with the pair completing its recovery to the US election related highs at 1.0937, with the bounce from last week’s lows totalling 5.55%. Spot also substantially narrowed the gap to resistance at 1.0961, the 76.4% retracement of the Sep 25 ‘24 - Feb 3 bear leg.
  • While US CPI will be the significant driver of short-term sentiment, the technical uptrend is overbought, and a pullback would allow this set-up to unwind. Support remains much lower at the prior breakdown point of 1.0668.
  • The EU announced €26bn worth of retaliatory tariffs against the US, however the brief EURUSD dip below 1.0900 has been well supported and the pair has been consolidating above the figure as we approach the data.
  • Waning global risk sentiment in recent weeks has allowed the single currency to also outperform in the crosses, and EURAUD remains a standout here, having extended its 3 week bounce to 6.5% at its peak on Tuesday. An appreciation today would extend an uninterrupted winning streak to 14 sessions.
  • An update of some short-term EURUSD analyst views to follow.