EUR Trading Outlook (17-06-2014)

EUR/USD A spike in US yields early in Europe’s morning saw EUR/USD make a quick dive to 1.3500/15 support again. The level held though and the pair sat near 1.3545 into NY’s open. The bounce persisted in early NY even as U.S. IP, Cap Utilization and NAHB data gave positive surprises. Short covering on recently popular carry trades and a give back of early US bond yield gains aided EUR/USD’s lift. The pair rallied to the 200-hour MA (1.3580 at the time) where large offers were noted on the aggregators. More offering interested was noted up to the 1.3600 area. This was enough to halt the rally & the pair pulled back to sit near 1.3565 late in the day. Little data is due from the EZ so the broad 1.35-1.36 range is likely to remain intact. The US releases CPI tomorrow & has the FOMC on Wednesday. hawkish results from those two events could lead EUR/USD to break its recent consolidation phase and make a run for stops below 1.3500 and large ones touted below 1.3475/80. A stop run could see the pair make a quick run to solid support near 1.3300.