EUR Trading Outlook (24-09-2014)

EUR/USD Shorts were squeezed in Europe’s morning as the USD and US yields were generally soft. the pair bounced off hourly support near 1.2840 and touched 1.2901 just as NY got going. The USD’s slide abated even as US bond yields remained heavy. EUR/USD began sliding as broad based USD strength trumped the weaker bond yields. MNI headlines quoting economists from the SF Fed saying there is a ‘sizeable wedge’ between FOMC & market expectations for rates aided to accelerate the slide a bit. US Sep Mfg-PMI came in slightly below estimates but wasn’t enough to stem the pair’s slide. NY near the overnight low but couldn’t manage further losses and the USD’s rally halted. A slight bounce in the afternoon saw the pair near 1.2855 late in the day. Traders now look to Germany’s Sep IFO release for their next cue. A soft result likely sees more EUR/USD losses and the pair retest the 1.2800 barrier. Large 1.2850 expiries for Wednesday may temper bears but if the barrier is cleared a quick move to key support near 1.2740/50 may ensue.