EUR Trading Outlook (18-11-2014)

EUR/USD Asia’s rally was short lived and Europe erased the gains after the USD’s slide reversed and comments from ECB’s Mersch weighed. Mersch noted the theoretical possibility of buying state bonds, gold or shares. EUR/USD slid towards 1.2480 before a slight bounce had it near 1.2500 into NY’s open. NY attempted an early lift but couldn’t get it back above 1.2510. Comments from ECB’s Praet and Draghi then weighed further. Praet was confident that the ECB will hit its 1 trln EURO balance sheet target while also noting the ECB built a strong disconnect with US rates and the ECB wants to keep it that way. Draghi was dovish again & noted additional measures could include further size and composition changes to the b/s. He also noted sov bond buys could be included in the unconventional measures. EUR/USD tanked, cleared the 200-HMA and quickly hit a 1.2445 low. bounces off the low were capped by the 200-HMA (1.2456) and the pair sat just below that average late in the day. Germany’s Nov ZEW is the main risk o/n. A weak report likely sees EUR/USD under pressure. We may then see the 2014 low retested.