EUR Trading Outlook (25-11-2014)

EUR/USD The pair’s inability to break the key 1.2350 level in Asia elicited broad base short covering in Europe & NY. EUR/USD saw a steady rise in early Europe & sat just above 1.2400 as NY got going. The pair ignored USD/JPY’s spike above 118.00 and was instead driven more by EUR/JPY’s rise above 147.30 and serious short covering rallies in EUR/AUD, EUR/CAD & EUR/NZD. NY saw a steady rise and solid offers in the 1.2420/40 region were cleared with the pair eventually reaching a 1.2445 high. Little pullback from that high was seen as a solid two year US note auction weigh on treasury yields. This had EUR/USD near 1.2435 late in the day. With the second attempt to clear 1.2350 failing, the risk of a double bottom grows as a short market starts to lighten up ahead of the US holiday later this week. There is little major data overnight that might affect the pair so the market likely will wait for US Q3 GDP and Nov consumer confidence. It’s likely a big upside surprise will be needed to see bears make a third attempt at 1.2350. If it does break it likely means a resumption of the longer-term down trend.