EUR Trading Outlook (27-10-2014)

EUR/USD A tight range held in Europe’s morning as EUR/USD lingered 1.2635-65 with it ultimately sitting near 1.2650 into NY’s open. A quiet session looked set to hold in NY but a flurry activity ensued on a leak of the ECB draft on the bank AQR. The story noted that 25 banks would fail the tests at the end of 2013. EUR/USD dived down near 1.2645 but quickly recovered as traders took a second look at the story. It was also noted that only 10 of the banks face shortfalls at the moment. EUR/USD then saw a relief rally as European bank stocks rallied. The pair ran s-t stops above 1.2680 and worked through Asian offers up to 1.2690 before hitting a 1.2694 high. The pair slid off the highs as Germany’s Merkel & France’s Hollande hit the wires. Merkel noted that Draghi made it clear to EU leaders that reforms & improved investment was key for the EU recovery while Hollande stated that dialog on France’s deficit reduction continues but “France thinks it has done what is necessary’. EUR/USD hit 1.2660 but then sat near 1.2670 late in the day. Traders now await the official test results due Sunday.