EUR Trading Outlook (01-08-2014)

EUR/USD The pair held to a relatively tight range as it consolidated recent losses ahead of key data risk. Europe pushed EUR/USD lower from just above 1.3400 towards 1.3385 into NY’s open. Firm US bond yields o/n pressed the USD higher to aid the pair’s dip. Early NY saw further upside in yields & EUR/USD dipped to 1.3372. Jobless claims were higher than f/c but the prior release saw a nice revision while Q2 Employment Cost came in at 0.7% vs. expected 0.5%. The data helped the pair to the day’s low. Bears couldn’t push further as a mkt well short of EUR looked to cover pre-NFP. A slight lift took hold & the PMI miss gave a boost. US yields & the USD slid off the PMI miss & EUR/USD tested 1.3400 again. A small pullback had the pair near 1.3390 late in the day. Traders now await the US jobs report. Should the report be upbeat, US yields should resume their recent rise & take the USD along with them. A solid jobs report diminishes the Fed’s tip Wednesday regarding labor slack. A good jobs report likely sees EUR/USD bears gun for the weekly cloud base & Nov low (1.3317 & 1.3295 respectively).