EUR Trading Outlook (02-02-2015)

EUR/USD Europe rallied the pair towards the Jan 29 high and 10-DMA but failed to breach either. JPY strength weighed on EUR/JPY which aided to cap EUR/USD’s lift. The pair slid a bit and sat near 1.1345 into NY’s open. Bear pressure remained on the pair and even a below f/c US GDP print gave little relief. The pair’s slide extended to 1.1278 as EUR/JPY neared 132.35. An afternoon lift for the USD helped keep the pair near the day’s low and it sat just below 1.1300 late in the day. There is little in the way of major EZ data to drive the pair next week so the USD side of the data equation will get the most impact. January ISM mfg and non-mfg as well as the Jan US jobs report will get the markets attention. Should the reports come in weak EUR/USD may see a squeeze. Stops above the Jan 27 high then may be run. If the squeeze persists it’s possible a run to the 21-DMA and 1.1650/80 zone could ensue as the market still holds large short positions. Solid US data reports likely see the l-t bear trend go further and the pair make a run at the psychological 1.1000 level..