EUR Trading Outlook (30-07-2014)

EUR/USD An early rise in Europe was rebuffed at 1.3444 as Asian & spec offers touted near 1.3450 kept bulls from pushing too hard. A slip from the day’s high had the pair near 1.3435 as NY got going. US yields were on the soft side but USD strength permeated the mkt. The pair slid right out of the gate and broke the overnight low. Helping the slide was Moody’s downgrade of Deutsche Bank’s senior debt & deposit ratings. USD/JPY’s break above 102.00 emboldened USD bulls and EUR/USD slid towards 1.3410. A slight bounce towards 1.3420 was rebuffed as new sanctions on Russia from the EU were announced. A low of 1.3404 was hit but the 1.3400 barrier protective bids only provided a minimal bounce. This is likely to make defense of the barrier difficult as those protecting the barrier have had little chance to sell the EUR/USD bought to defend. If no serious bounce is encountered soon specs looking to fade a rally might come to market ahead of the key US event & data risk due the rest of this week. Large stops are touted sub-1.3400 and if run the door to the Nov low at 1.3295 opens.