EUR Trading Outlook (02-03-2015)

EUR/USD Light short covering in Europe saw EUR/USD lift to 1.1245. Touted offers in the 1.1250/60 zone weighed and the pair slipped a bit into NY’s open. NY made a run at the offers as well but failed as well. The better than f/c GDP result put the USD on firm footings. EUR/USD dived below the Feb 26 low and hit a new s-t trend low of 1.1176. Some of those losses were taken back after Chicago PMI had a big miss. More losses were taken back as month-end USD sales took hold. The pair threatened hourly resistance near 1.1230 but couldn’t clear it. The pair then slipped and sat just below 1.1200 late in the day. China’s Feb NBS Mfg PMI and EZ Feb CPI are the big data risks to kickoff next week. Impact might be limited though as the market awaits the ECB on Thursday and details of the upcoming QE program. For now it looks like bears retain control as long upper wicks are in place on the daily & monthly candle, RSIs provide bearish momentum and yield spreads go further in USD’s favor. A retest of the 2015 low looks likely next week.