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Headwinds Seen at $1.2200 as ECB Meet Looms

EUR
MNI (London)
  • Monday's NY session extended the post NFP recovery, following consolidation through Asia and the European morning, taking EUR/USD to a high of $1.2202 (Friday low $1.2104) before momentum faded and rate eased to $1.2189 into the close.
  • EUR/USD lifted to $1.2194 through the Tokyo fix, as JPY pairs were bid, then drifted lower in post fix trade to $1.2178.
  • Underlying bid tone remains in EUR/USD but traders will be wary ahead of the ECB meeting Thursday. Already seeing suggestions that the Bank may promote a dovish tone(no change in pace of asset purchases?) in an effort to ease the current EUR strength, though they will say they don't target a specific level for the currency. Comments often arise when EUR/USD looks set to rise above $1.2200.
  • On this note, resistance is noted at and above $1.2200, especially between $1.2205/20($1.2219 76.4% $1.2254-1.2104), a break here to expose $1.2254/66(Jun01 high/May25 high).
  • Support $1.2165/45(38.2% $1.1.2104-1.2202/Jun07 low), break here turns attention back toward $1.2100.
  • Germany IP 0600GMT(median 0.4%mm, 29.5%yy), EZ GDP, Employment, with more focus on Germany ZEW 0900GMT (ZEW median Expectations 86.0; Current Situation -28.0) US Trade 1230GMT. Fed blackout period.
  • MNI Techs: EURUSD is holding onto its most recent gains and is trading above last week's low of 1.2104. The pair remains vulnerable though following a sharp pullback Jun 3 that saw price trade through initial support at 1.2133, May 28 low. If correct, this highlights potential for a deeper correction and attention is on the 50-day EMA at 1.2102 that also represents a key area of support. On the upside, primary resistance has been defined at 1.2266, May 25 high.
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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