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Stretches on to $1.2084. Could EUR Strength Spark Comment?

EUR
MNI (London)
  • EUR/USD recovery off Monday's post month-end fix low of $1.1924 extended through Tuesday's session, to $1.2077, holding most of its gains into the close ($1.2072).
  • Traders reminded that Monday's close above the October high of $1.1881 provided for a technical outside month for November, keeping upside potential in place.
  • Rate drifted off to $1.2061 in early Asia before EUR/JPY demand emerged which took rate on to $1.2084 but momentum quickly faded.
  • Rate eased to $1.2067 ahead of the European open, currently around $1.2076.
  • USD remains under general pressure aided by risk outlook, US fiscal stimulus hopes remain. Equities made further gains Tuesday along with 10y UST yields.
  • Traders in Asia noted the pressure on the USD sparked some cenbank activity, buying USD's, part of which, for accounting purposes, will be converted to EUR reserve holdings. Strength of the EUR could spark some comment from ECB officials.
  • Resistance now seen at $1.2084 with talk of option linked interest on the approach to $1.2100. Nothing showing on DTCC calendar, suggestion we could be moving into barrier territory. Support $1.2060/50, $1.2011/00, $1.2000.
  • Germany Retail Sales at 0700GMT, EZ Employment, PPI at 1000GMT. US ADP at 1315GMT as we look toward NFP on Friday.
  • Fed Powell and Tsy.Sec. Mnuchin speak at 1500GMT.
  • MNI Techs: EURUSD registers a fresh 2020 high following the breach of the Sep 1 high of 1.2011. This cements the bullish outlook and confirms a resumption of the uptrend that has dominated since March. The objective of 1.2084, May 1st 2018 high tested overnight. Attention turns to 1.2102, 76.4% of the entire 2018-20 downtrend. A break would reinforce bullish conditions. On the downside, 1.2011 marks initial support.
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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