EUR Trading Outlook (11-09-2014)

EUR/USD Bears were squeezed in Europe as EUR/USD matched the Sep 8 high (1.2963). The effects of the squeeze faded into NY’s open & sat near 1.2950. The USD was generally bid in early NY and bears erased most of Europe’s rally. Further pressure came after a DJN story ran stating the SNB was open to negative rates. While EUR/CHF spiked up to 1.2119, EUR was sold heavily vs. the other major currencies. EUR/USD slid to a 1.2883 low, EUR/GBP dipped below 0.8000 & EUR/AUD tested near 1.4075/80.EUR/USD tried to rebound above 1.2920 but couldn’t as GBP rallied to 1.6231. This pushed EUR/GBP to a new day low of 0.7954 and saw EUR/USD dip back near 1.2900 late in the session. Traders now look to consumer inflation reports from Germany and France tomorrow. The data could have added impact after ECB’s Mersch noted that QE style govt bond buys would only come under two conditions with one of them being inflation remaining at current low levels for too long. Weak CPIs may see 1.2850 break & the door to 1.2740 open.