EUR Trading Outlook (04-11-2014)

EUR/USD grudgingly climbed in Europe’s morning. It lifted from near 1.2480 towards 1.2510. Big gains in EUR/JPY (140.70 to a NY high of 142.56) aided the lift but they were offset by broad base USD strength as USD/JPY blasted higher from the 112.85 area. EUR/USD sat just below 1.2500 as NY got going and saw an early lift back to 1.2510 as EUR/JPY stayed firm. The USD’s bid remains and the pair began slipping. The slide accelerated a bit as a Reuters poll showed a median 50% chance the ECB will buy sovereign debt in the coming year. This was upped from a 40% chance noted from an Oct 13 poll. The slide’s pace was then upped after a big upside beat to October ISM sent US yields and the USD higher. EUR/USD went on to hit a NY low of 1.2471 before lifting back above 1.2485 late in the day. There is little major EZ data due so traders look to the European Commission’s autumn econ forecasts and US Sep factory orders for some cues. It’s likely they’ll have limited impact as the market’s attention is more focused on Thursday’s ECB meeting. Until then the pair may hold in a tight & choppy range.