EUR Trading Outlook (12-11-2014)

EUR/USD Light short covering took hold in Europe’s morning after USD/JPY’s rally stalled. EUR/USD lifted from the 1.2400 area towards 1.2420 as NY got going. Early NY saw a slight bid but the pair was hemmed as USD/JPY remained near its highs early in NY and EUR/JPY was firm. The short covering resumed though as the USD saw broad based selling as USD/JPY broke key intra-day supports. EUR/USD broke s-t resistance near 1.2450 and cleared the 200-HMA as well. The pair went on to make a 1.2499 high before sellers emerged. USD/JPY bounced off the 115.00 area and this allowed EUR/USD to slip back towards the 200-HMA. Late in the day the pair say just above 1.2480. There is little in the way of major data overnight that might affect EUR/USD so action might be limited until the US bond market reopens on Wednesday. Big data risk towards the end of the week is likely to keep traders on the sidelines as well. Until then the 1.2355/1.2580 range likely holds.