EUR Trading Outlook (18-07-2014)

EUR/USD A brief lift in early Europe saw the pair bounce off support near 1.3520 and touch 1.3540. Bears were lurking though and pushed the pair back below 1.3530 into NY’s open. US data was mixed with jobless claims improving but housing and permits data deteriorated. US yields and the USD turned heavy. EUR/USD got very little benefit though as it hardly moved back above 1.3530 before resuming its steady slide. The pair then hit a new s-t trend low (1.3516) after the Malaysia jet downing increased risk-off sentiment. EUR/JPY’s slide from above 137.40 towards 136.90 aided EUR/USD in hitting the new low. Bears couldn’t press their case further though as the mkt needs to digest the Ukraine issue further and solid bids remain into 1.3500. A small bounce had the pair near 1.3525 late in the day. A light data calendar overnight may see action limited again. S-T risks are likely skewed to the topside as short covering into the weekend may be the theme over the next session. The long-term trend remains bearish.