EUR Trading Outlook (28-08-2014)

EUR/USD A tight range held in Europe’s morning with EUR/USD lingering near 1.3190 as the USD and US bond yields were generally soft. Early NY saw a minor recovery for yields and USD. EUR/USD dipped below 1.3170 even as it was announced the ECB selected Black Rock to help develop a plan for ABS buys. The dip was short lived though. A Reuters story quoting unnamed ECB sources stated that new ECB action next week is unlikely unless August’s CPI data show the EZ heading significantly towards deflation. EUR/USD spiked higher as shorts scrambled to cover. The pair cleared 1.3200 and hit a 1.3210 high. Asian sellers stalled the rise and the pair then drifted a bit lower. Late in the day the pair sat just below 1.3200. Traders now turn their focus to German August jobs and inflation data followed by US GDP and jobless claims. Should the German data come in weak the comments by the ECB sources may lose their influence and EUR/USD might then make another try at cracking 1.3150.