EUR Trading Outlook (10-07-2014)

EUR/USD Offers into the 200-HMA and 1.3640/50 zone saw Europe smash EUR/USD lower from the 1.3631 level & have it sitting just above 1.3600 into NY’s open. Early action was limited but the pair looked set to make further losses as US yields and the USD were generally firm. Lower levels were not to be though. EUR caught a bid in the crosses, especially vs. JPY, AUD & GBP) and began rallying. The 200-HMA was cleared and 1.3640 breached but the gains fades as US yields held firm and the Fed minutes were due. A drift lower had the pair near 1.3625 into the minutes. A quick spike lower off the tip to ending QE in Oct. if econ conditions could support the cut saw EUR/USD test near 1.3610. The slide reversed though as there seemed to be no mention of rate hikes in the minutes. Broad based USD sales by CTAs aided EUR/USD’s lift. The earlier high was cleared and a new high of 1.3648 was set. Draghi spoke and gave lip service to a lower EUR but it had no effect. Little pullback was seen & EUR/USD sat near the high late in the day. Traders look to China’s trade data & BoJ later for their next cues.