EUR Trading Outlook (21-01-2015)

EUR/USD The pair held to a relatively tight range for Europe & NY but EUR/USD did lean a bit bearish for both sessions. Europe dropped the pair from the 1.1615 area towards 1.1575 as NY got going. JPY weakness in early NY pushed EUR/JPY towards 137.65 and this took EUR/USD back above 1.1605 for a brief period. Bears emerged though as broad USD strength was the dominant theme for NY. EUR/USD steadily slid lower and tested 1.1540. Very little bounce was seen as the pair lingered near the lows late in the day. There is little econ or event risk for Europe & NY that would drive the pair so traders will likely look to external factors. The UK sees the MPC meeting and the BoJ Monetary Policy statement are the main risks for EUR. As it stand the long-term bear trend remains but some consolidation is likely into the ECB. RSIs are o/s and need unwinds but the market still looks to sell rallies and the pair struggles on moves above 1.1630/40. We may have to wait until Thursday to see if the next bear leg takes hold of is a big short squeeze runs its course.