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Month-End Dynamics Prompt EUR/USD Retreat

EUR
MNI (London)
  • USD pared recent losses Wednesday, noted that yesterday was for month-end value (May28) due to the US holiday Monday. Month-end value often sees US corporate USD demand emerge, which along with other month-end dynamics (prelim month-end models suggest mild USD demand to be seen at the fixes) prompted the pull back.
  • Reversal off yesterday's high of $1.2263 saw rate pressed to $1.2217 in early NY, recovered to $1.2240 before another round of pressure saw it trade down to $1.2182, closing the day at $1.2193.
  • Asia applied further pressure via USD/JPY demand, eased EUR/USD to $1.2175 before edging back above $1.2190 ahead of the Europe.
  • Support $1.2175, break to expose the $1.2161/59 area (May21 low/$1.2160 May19 low/50% 1.2052-1.2266, 38.2% 1.1986-1.2266).
  • Traders suggest leveraged and IMM names are long EUR/USD, a break below $1.2150 could accelerate sales toward $1.2135/25.
  • Resistance $1.2200, $1.2240/45, a break to expose $1.2263/66 ahead of $1.2285/1.2300.
  • ECB de Cos(dove) 0800GMT, Guindos (dove) 0945GMT, Weidmann (non-voter, hawk)1200GMT, Schnabel (no bias)1500GMT.
  • US GDP, Core PCE, Weekly Jobless Claims, Durable Goods 1230GMT, US Pending Home Sales 1400GMT
  • MNI Techs: EURUSD faced selling pressure Wednesday. Despite the pullback, the pair is still trading within its recent range and the outlook remains bullish. The recent breach of 1.2245, May 19 high strengthens the positive theme and opens 1.2285, Jan 8 high. Further out, the 2021 high of 1.2349, Jan 6 high beckons. On the downside, key short-term support has been defined at 1.2052, May 13 low while initial support remains 1.2160, the May 19 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
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