EUR Trading Outlook (23-10-2014)

EUR/USD Europe pushed EUR/USD from the day’s high (1.2740) to 1.2681 ahead of NY’s open on HF sales and a report from EFE that 11 banks will fail the stress test. The pair bounced a bid off the low & sat near 1.2690 as NY got going. NY lifted the pair as the ECB released a statement saying media reports on the tests outcome are by their nature highly speculative. EUR/USD rallied towards the 200-HMA but fell short as it could only reach 1.2728. The lift began to fade. The pair’s slide picked up its pace after US CPI headline data came in above forecasts. A quick dive to 1.2660 ensued. Some consolidation took hold but the limited bounces met selling pressure. Risk sentiment soured in NY’s afternoon as stocks erased all earlier gains and turned negative on the day. EUR/USD slid with risk and hit a new low of 1.2642. Very little bounce was seen and the pair sat just above 1.2645 late in the day. Economic data presents the next risks for EUR/USD. China’s Oct HSBC Mfg PMI and numerous EZ PMIs are due. Soft results should weigh on EUR further. Daily lows in the 1.2585/1.2625 zone may then get tested. Breaks of those lows puts the 2014 low back in play