EUR Trading Outlook (08-09-2014)

EUR/USD Tight ranges held in Europe as the pair consolidated losses before the US jobs report. EUR/USD sat ~1.2950 pre-data. The NFP missed as only 142k jobs were created vs. 225k f/c . US yields slipped and the USD dropped across the board. Model accounts covered short EUR/USD positions a 1.2990 high was hit. Offers into 1.3000 capped & the pair began slipping. Traders began to think the jobs report was likely a one-off blip & won’t change the Fed’s current course of ending asset buys. RM & sov selling entered the market and the pair dipped back below 1.2950 even as US bond yields weren’t far from the day’s lows. Late in the day the pair sat just above 1.2955. Next week presents a light data calendar for the US and EZ so consolidation may dominate for the first half of the week. August CPI figures for many EZ nations are due Thursday & Friday and might impact EUR/USD especially if they are below f/c. Technically the outlook remains bearish as the pair closes below the 50% Fib of 1.2042-1.3995 & the late-July 13 low while weekly RSI’s bias remains down. A move through 1.2900 opens the door to a test of 1.2740/90 support.