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Struggles to Gain a Toe Hold Back Above $1.2100

EUR
MNI (London)
  • Wednesday's early risk positive outlook reversed in Europe(from around the 0800GMT fix), the market reacting to ECB Knot dovish comments(a known hawk), then gathered pace in early NY open. The break of $1.2100 exposed stops which took rate to a low of $1.2059, holding just shy of its Jan18-YTD low of $1.2054.
  • The fall in equities said to have led the reversal in risk outlook, some cited positioning adjustments into month-end.
  • It was noted yesterday that Wednesday's month-end value could also have seen US corporate USD demand emerge.
  • Rate recovered in post 1600GMT fix trade to $1.2129 before it settled around $1.2110 into the close.
  • Asia reaction to equity market slippage saw another round of risk off USD demand emerge, with EUR/USD pressed down to $1.2083 before equities recovered which saw rate tentatively probe back above $1.2100.
  • Rate seen needing to clear back above Tuesday's low of $1.2108, then Thursday's NY recovery high of $1.2129, to boost upside recovery, bringing into play the retracement levels of $1.2140/60(61.8%-76.4% $1.2190-1.2059). Support $1.2059/54, $1.2040 ahead of $1.2010/00.
  • Germany states then pan-Germany CPI in view (Saxony 0800GMT, pan Germany 1300GMT ) ahead of EZ Confidence data at 1000GMT.
  • US data includes Core PCE, 4Q GDP, Weekly Jobless Claims at 1330GMT, New Home Sales 1500GMT. ECB Schnabel speaks at 1715GMT.
  • MNI Techs: EURUSD traded lower Wednesday but failed to make any headway through the Jan 18 low of 1.2054. A breach of this support would signal a resumption of the down leg that has been in place since the Jan 6 high. This would pave the way for a move towards 1.2011, Sep 1 high and the psychological 1.2000 handle. A move below 1.2000 would open 1.1976, a Fibonacci retracement. Clearance of 1.2190, Jan 22 high is required to reinstate a bullish theme.
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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