EUR Trading Outlook (15-09-2014)

EUR/USD A tight range held in Europe as the mkt contemplated whether short covering into the weekend or further USD strength would reign. The USD was firm but positioning dominated as EUR/USD lifted from 1.2915 & sat near 1.2930 into NY’s open. The short covering persisted in early NY as the pair neared 1.2955/60 but US retail sales data weighed. The headline data met expectations but prior data was revised up. US yield lifted as did the USD. EUR/USD spiked down below 1.2910 but the dip was bought. A steady ascent then saw the highs of Sep 8 & 10 cleared and weak stops above 1.2970 run. The rally extended to the 200-HMA but failed to gain ground as solid offering interest was reported in the 1.29870/90 area. The USD recovered some lost ground and EUR/USD slid towards 1.2940. Late in the day the pair sat just above 1.2945. Bears might get squeezed again early next week. Weekly RSI diverged on the new low and a doji formed on the weekly candle. With such a big drop recently a deeper retracement within the longer-term down trend cannot be ruled out. Above 1.3000 eyes good res near 1.3125/50.