EUR Trading Outlook (22-09-2014)

EUR/USD The reversal in GBP/USD from its high saw a large rally in EUR/GBP from below 0.7820 towards 0.7880. The rally was of no use to EUR/USD after another try at breaking the 200-HMA overnight failed. EUR/USD plunged during Europe’s morning to sit near 1.2865 as NY got going. Some USD weakness inspired by USD/JPY’s slide saw EUR/USD lift near 1.2880 early in NY but bears emerged. From the NY high (1.2877) the pair steadily slid, cleared the Sep 17 low & made a new trend low of 1.2831. Little bounce was seen for the pair as the USD remained firm even as US bond yields traded on their lows for the day. EUR/USD sat just above 1.2835 late in the day. The rotten price action for the pair suggests lower levels are due as do techs & spreads. A weekly bearish engulfing candle is in place, day/week RSIs resume their bear bias and yield spreads remains at recent wides. Immediate support sit at 1.2800 followed by the 61.8 Fib of 1.2042-1.3995 but they’re only likely to slow the slide. Bears seem intent on testing major support near 1.2740 for now.