EUR Trading Outlook (15-10-2014)

EUR/USD Europe pushed EUR/USD below the 200-HMA and hit 1.2640 as sour risk sentiment took hold. The pair hit a 1.2640 low as EUR/JPY’s plunge from 136.25 to 135.04 weighed. An upward shift in risk sentiment weakened JPY a bit and lifted stocks. EUR/JPY bounced to 135.70. EUR/USD got only a slight lift and neared hourly resistance at 1.2680. The bounces faded though as US equity markets slid from their highs and gave back a good part of their gains. EUR/USD slid back near 1.2740 and EUR/JPY slipped towards 135.25. Both pairs sat near those levels late in the day. Traders now turn their focus to September inflation readings from China and Germany. China releases CPI & PPI while Germany gives the mkt CPI & HICP. Should the results come in soft EUR likely gets hit as deflation fears will increase. EUR/USD is then likely to run stops touted below 1.2600 and we’ll then see the 2014 low back in play.