EUR Trading Outlook (13-10-2014)

EUR/USD The pair’s failure to clear s-t resistance near 1.2720/30 gave Europe an excuse to sell EUR. sour risk sentiment and a firm JPY were added reasons. Bears sold EUR/USD from near 1.2715 towards 1.2650 before a bounce had it near 1.2670 into NY’s open. Collapsing oil prices and increased risk-off sentiment, driven by soft equity mkts, saw NY push EUR/USD down further. The pair dived to a 1.2609 low. A turn in sentiment and some softening for the USD allowed the pair to lift to 1.2645 into the 10:00 am options expiry where large 1.2650 & 1.2625 XXX’s sat. The rally was snuffed out though as Draghi hit the wires. He reiterated that econ outlooks remain on the downside while also noting that risks to inflation’s outlook will need close monitoring. The pair approached the day’s low but couldn’t match it. Late in the day the pair sat just above 1.2615. Bears assert themselves again as the pair slips below the 10-DMA again. A test of 1.2500 may be due next week. EZ Sept. CPIs & German Oct ZEW are out next week. Soft results should pressure EUR lower & possibly see 1.2500 break. If 1.25 is cleared l-t bears eye roughly 1.2050.