EUR Trading Outlook (29-10-2014)

EUR/USD An early rally in Europe was rebuffed after EUR/USD failed to climb above the 200-HMA. The sell-off from the 1.2715/20 area saw 1.2685 hit. A rebound occurred as EUR/JPY lifted off from the 136.95 area. EUR/USD bounced & sat just above 1.2700 into NY’s open and US econ data. Durable goods saw a big miss. US rates and the USD fell broadly. EUR/USD cleared the 200-HMA and ran spec stops just above it. Asian offers in the 1.2735/45 area were well absorbed and the pair went on to hit a 1.2765 high. The pair dived back to the 200-HMA after consumer confidence was solidly above f/c. The dip was bought though as EUR/JPY’s rally was unrelenting on its trip to 137.81 high. EUR/USD bounced back above 1.2740 and spent the remainder of NY range-bound in the 1.2740/55 zone. The market’s focus now shifts to the Fed. Should the Fed acknowledge recent soft US data and lean dovish it’s likely EUR/USD will remain bid as US rates adjust lower. A trip toward 1.2900 and possibly 1.3000 cannot be ruled out at that point.