EUR Trading Outlook (03-07-2014)

EUR/USD An early European lift for the pair couldn’t break s-t resistance near 1.3685 and the pair drifted lower. The big beat on UK’s June PMI sent GBP higher and EUR/GBP plummeting through 0.7970/75 support. it eventually hit a low of 0.7950 (D3). EUR/USD was pressured off that drop and slipped from the highs towards 1.3655 before lifting near 1.3670 into NY’s open. Bulls ran into further trouble after the ADP jobs came in well above estimates. US yield and the USD put in solid gains. EUR/USD dumped down to a 1.3641 low before intra-day short covering ahead of Yellen took it back to 1.3660. Action settled after Yellen’s remarks saw little reaction from the markets. EUR/USD dipped back near 1.3655 and sat there late in the day. Markets now await the ECB and US jobs data. The ECB is f/c to keep rates unch so focus will be on Draghi’s presser. Traders will look for tips to future policy and info on the TLTRO. Draghi is most likely to strike a dovish tone. While Draghi begins his presser the jobs report will be released. Should it surprise to the topside as ADP did, EUR/USD likely sees sub-1.3600 levels quickly.