EUR Trading Outlook (17-10-2014)

EUR/USD Offers into 1.3850 and Asian sellers in the 1.2860-80 zone had Europe apply bearish pressure to EUR/USD in their morning. With risk sentiment sour on falling equity and commodity prices EUR/USD made a steady move lower and eventually hit a 1.2705 low before bounce near 1.2745 into NY’s open. Early NY saw the pair lift after US econ data was better than f/c that eased some sour risk sentiment. The pair lifted near 1.2780 as EUR/JPY got most of the benefit on its rally from 134.75 to 135.20. EUR/USD then slipped back near 1.2730. the dip was bought as comments from Fed speakers Bullard and Kocherlakota put a bid into risk. Bullard’s comments were the big impact as he noted the Fed could contemplate increasing bond buys depending on data while he also noted the decline in inflation expectations are a serious matter for the Fed. EUR/USD took off as risk assets (stock, commodities) saw big rallies off their lows. A NY high of 1.2840 was hit but the pair then slipped a bit as risk assets gave back some of their rallies. Late in the day the pair sat near 1.2800.A lack of major data in Asia & Europe will have traders focusing on equity & bond markets for cues.