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Option Linked Resistance Provides $1.1990/1.2000 Upside Hurdle

EUR
MNI (London)
  • Risk appetite remained in place through Thursday's session but USD sales failed to make much impression in EUR/USD as rate faltered at $1.1993 before backing off to $1.1957, closing at $1.1967.
  • Option related sales cited for the resistance between $1.1990/1.2000, talk suggests $1.17-1.20 DNT option structures drawing the sell interest.
  • Early consolidation in Asia around $1.1970 before rate posted a high at $1.1975 as market reacted to an initial dip in USD/JPY, but as this rate bounced so EUR/USD was pressed down to challenge next noted support at $1.1950.
  • With USD/JPY failing to advance on Y109.00, saw EUR/USD edge back to $1.1965.
  • Support remains at $1.1950, a break to expose $1.1930/20 ahead of $1.1905/00.
  • Resistance remains between $1.1990/1.2000, break of $1.2010 to expose $1.2020/30, above here to boost upside hopes.
  • Eurogroup meeting 0730GMT, Lagarde and Panetta attend, not expected to speak. Press conference 1200GMT. EZ Trade, final CPI due at 0900GMT. Bk of Italy release Qly Econ.Bulletin 1300GMT. Informal meeting of EU FinMins 1305GMT, press conf 1605GMT.
  • US Housing Starts/Building Permits 1230GMT. UofM Confidence 1400GMT.
  • UST 10-yr yield back below 1.6% but only having a muted USD effect. Weekend approaching so we should expect some position adjustments, possible USD short covering.
  • MNI Techs: EURUSD is holding onto recent gains and yesterday briefly traded above 1.1990, Mar 11 high. A solid break of this level would strengthen a bullish argument and signal scope for an extension of recent gains. The recent breach of the 50-day EMA is a bullish development and S/T momentum signals point north. On the downside, initial firm support is seen at 1.1861, Apr 7 and 8 low. A break would signal the end of the current recovery.
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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