EUR Trading Outlook (14-07-2014)

EUR/USD Short covering from the July 10 sell-off saw EUR/USD pushed up to the 200-HMA in Europe’s morning. The quieting of the Banco Espirito Santo issue seemed to be the main driver for the gains. Offers at the MA and just above stalled the rally and the pair slid towards 1.3600 as NY got going. NY pushed the pair to a low of 1.3592 with no further losses possible after that. With no data to spark a move and the Fed speakers not breaking any new ground there was little reason for the market to push too far in either direction. The pair lifted off the lows and sat just below 1.3610 late in the day. Bears have been relatively patient as the pair continues to consolidate losses from the May drop but may be rewarded soon. The US has retail sales, PPI, IP and housing data next week. should results come in above forecasts the mkt may up the chances the Fed hikes rates sooner than later. US yields and the USD would then lift. EUR/USD might get a chance to break 1.3475/00 support. If broken a quick move to sub-1.3300 levels is likely as numerous techs supports will be broken. Beyond 1.3300 l-t bears will target 1.3000 & 1.2740/60 supports.