EUR Trading Outlook (15-01-2015)

EUR/USD The ECJ ruling on the OMT program sank EUR/USD in Europe’s morning to hit a low of 1.1728. Short covering had it near 1.1760 into NY’s open and just slightly highs into retail sales. The big miss and downward revisions to prior sales data sent US bond yields and the USD tumbling. EUR/USD spiked up to a 1.1846 high. Offers into the 200-HMA and hourly highs near 1.1850/60 prevented further gains. The USD’s slid abated and the losses began to erode. EUR/USD slide from the highs and filled the post-data gap. Little bounce was seen though as the USD firmed in the afternoon and the pair sat just above 1.1775 late in the day. There are some short squeeze risks as a doji has formed after the new low was set, daily RSI diverged and yield spreads narrow a bit. However the long-term trend remains down and the market looks to fade rallies. Sellers are touted in the 1.1870/00 region for now.