EUR Trading Outlook (18-06-2014)

EUR/USD Europe made a couple of attempts to clear the 200 hour MA overnight but failed. Solid offering interest ahead of 1.3600 conspired with the MA to cap European bulls at 1.3579. A drift lower had it near 1.3565 into NY’s open. A brief rally came crashing down after the above forecast US CPI. US yields spiked higher after the data & the USD went broadly bid. EUR/USD dived down to a 1.3536 low but only a meager bounce near 1.3550 was possible. US yields and the USD held firm in NY’s afternoon and the pair sat near 1.3540 late in the day. Traders now await the Fed tomorrow. They will look to see if today’s CPI has the FOMC’s language take a more hawkish bend. Should that be the case EUR/USD is likely to take out the 1.3500 barrier and run stops below that level and 1.3475/80. Bears then target big support near 1.3300. Should the Fed lean the other way EUR/USD bears are likely to cover. The pair then may be set to trade a broad 1.3500-1.3750 range for the time being.