EUR Trading Outlook (13-03-2015)

EUR/USD Short covering in Europe had the pair test near 1.0650 before pulling back below 1.0600 into NY’s open. NY bid the pair up early as shorts bought the dip. The lift got an added boost after US retail sales missed big and prior sales data results saw downward revisions. US bond yields fell and the USD saw a broad based spike down. EUR/USD quickly hit a 1.0684 high but the gains didn’t last long. Solid offering interest in the 1.0685/00 zone and talk of sovereign selling saw the pair quickly slip below pre-retail sales levels. The slide deepened in NY’s afternoon as bond yields clawed back some losses after a disappointing US 30 year bond auction. EUR/USD slipped just below 1.0600 and lingered nearby heading into the close. There is little major data from either the EZ or US tomorrow so action might remain choppy or be driven by positioning. With the market still well short EUR we might see bears get squeezed further into the weekend and ahead of the Fed next Wednesday.