EUR Trading Outlook (22-07-2014)

EUR/USD The attempt to breech 1.3550/75 resistance in Asia failed and Europe pressured EUR/USD lower during a session that saw relatively quite trade. the pair sat near 1.3520 as NY got going. Bear in NY managed to push a bit lower as a 1.3513 low was hit early. The downing of the Malaysia Airline jet from last week seems to be getting more market attention and traders begin to think EUR will not be a safe haven should the situation escalate further. This helped keep EUR/USD from mounting much of a rally off the lows & it sat just above 1.3520 late in the day. Traders will continue to monitor geopolitical risks but have data risk on the horizon. US CPI is due tomorrow. Forecasts call for little change from the previous result but traders are fearful to a topside surprise. An above f/c result should send the EUR/USD down as traders will then expect Fed rate hikes sooner than later. should the data come in well above expectations it’s likely the Feb low near 1.3475/80 will be broken. A sustained move below that support likely sees a quick run to sub-1.3300 levels as market chatter suggests traders don’t have large short positions on the books.