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Pivots $1.1900 as US CPI Moves into Focus

EUR
MNI (London)
  • Recovery off Monday's early Europe low of $1.1871 extended to $1.1918 ahead of the NY open, the US session then held a range of $1.1899-1.1999, closing the day at $1.1910.
  • Early Asia saw consolidation between $1.1911/16 before the USD picked up a general bid tone which acted to press rate to $1.1886 into Europe.
  • Fed Bullard comments cited for the USD pick up, noting that vaccine roll out is supporting positive growth outlook, adding that he 'will leave it to Fed Powell to initiate taper talk'.
  • Others mention US Biden's meeting with bi-partisan lawmakers, showed an openness to break fiscal proposals into smaller parts and consider different ways to pay for it. Willingness to negotiate was viewed positive.
  • Rate seen within an outside range of $1.1860/1.1920, some noting that the $1.1900 holds a decent amount of option expiry interest this week which could be helping to anchor.
  • However, Germany ZEW 0900GMT(median expectations 79.0; Current Situation -55.0), and especially US CPI 1230GMT(median 0.5%mm, 2.5%yy; core 0.2%mm, 1.5%yy), have the potential to break rate out of those parameters.
  • Support $1.1871/67, stronger into $1.1861, a break here to open deeper corrective gains from $1.1704. $1.1842(38.2% $1.1704-1.1927), $1.1816(50%), $1.1789(61.8%).
  • Resistance $1.1920/27, stronger into $1.1950.
  • MNI Techs: EURUSD is consolidating. The pair moved higher last week and is once again trading within its bear channel range drawn off this year's Jan 6 high - the channel base was breached in March. Recent gains are still considered corrective though with the next firm resistance at 1.1938, the 50-day EMA. A clear break of this average is required to signal scope for an extension higher. Initial support is 1.1861, Apr 8 low.
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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