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Recovery Momentum Falters on Approach to $1.2101

EUR
MNI (London)
  • The corrective pullback away from last Thursday's high of $1.2243 extended to a low of $1.1992 during Tuesday European morning trade before edging back to $1.2037 ahead of the NY open.
  • Early NY marked its session low at $1.2020 before recovery picked up fresh momentum, pushing up to $1.2074 through the 1600GMT fix, edging on to $1.2094 before closing the day at $1.2091.
  • UST yields and Fed speak remain key market drivers. UST 10yr yield eased back below 1.40% through the NY session, while Fed Brainard comments Tuesday noted there would be close attention on the speed of yield moves as well as monitoring effect tightening would have on economic recovery progress. Fed Powell speaks Thursday ahead of black out and expected to provide clarity.
  • UST 10-yr yields settled above 1.40% through Asia and provided little in the way of direction, EUR/USD trade restricted to a $1.2081-93 range though rate was resting on the base ahead of Europe.
  • Support $1.2080/70, $1.2050/40 ahead of $1.2030/15. Break here to expose Tuesday low at $1.1992 ahead of $1.1952(Feb05 low).
  • Resistance seen into $1.2100 ($1.2101 Mar01 high), break exposes $1.2120 ahead of $1.2140/50 and $1.2184.
  • EZ Services PMI in focus this morning, EZ Svcs PMI 0900GMT. EZ PPI 1000GMT. ECB de Cos 1200GMT, Panetta 1300GMT, Guindos 1500GMT, Schnabel 1930GMT.
  • US ADP (ahead of Friday NFP) 1315GMT, Svcs PMI 1445GMT, ISM non-mfg 1500GMT. Fed Harker(non-voter hawk) 1500GMT, Bostic(hawk) 1700GMT, Evans(dove) 1800GMT.
  • MNI Techs: EURUSD maintains a weaker tone despite yesterday's gains. This follows recent move lower and confirmation of bearish candle patterns on Feb 25, a shooting star, and bearish engulfing on Feb 26. Move yesterday through support at $1.2023 reinforces the bearish patterns and signals scope for weakness towards $1.1952, Feb 5 low. On the upside, $1.2101 is initial resistance. A clear breach of this level would expose $1.2184, Feb 26 high.
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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