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Key Support at $1.2060/59 in Focus

EUR
MNI (London)
  • The corrective pullback, off the Jan06 YTD high of $1.2349 extended to $1.2075 Friday before closing the week at $1.2081.
  • Early Asia edged rate to $1.2093 before fresh sales emerged, reacting to a report in the WSJ, to take rate to a further extended low of $1.2065, moving the Dec09 low of $1.2059 within touching distance. Tech traders also highlight the 55-dma at $1.2060.
  • WSJ ran a sources report suggesting Janet Yellen will affirm the US Govt's commitment to a market determined exchange rates and ensure future US policy won't seek weaker currency competitive trade advantages (strong USD policy)
  • Recovery efforts were capped at $1.2085 before a retest of the low, the rate edging back to $1.2080 into Europe.
  • US holiday observing Martin Luther King Day should make for slow markets with data calendars for Europe and the US light.
  • Support $1.2060/59, $1.2040, $1.2010/1.1995. Resistance $1.2093/1.2111.
  • Reports suggest we could again be close to a correction base, UST yields may have seen a recovery high, which along with a dovish Fed and Biden's COVID plan, provides reasons for another round of pressure on the USD.
  • MNI Techs: EURUSD is trading closer to recent lows. The move lower since Jan 6 signals the start of a correction that is allowing a recent overbought condition to unwind. Price action has this week traded through the 20-day and now 50-day EMAs to expose the early Dec lows at 1.2059, printed on Dec 9. Note too that the most recent consolidation appears to be a bear flag, reinforcing bearish conditions.1.2230 marks initial resistance.
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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