EUR Trading Outlook (19-06-2014)

EUR/USD EUR bears covered shorts in European hours, mostly vs. GBP, and EUR/USD lifted from s-t sup near 1.354. It sat just above 1.3560 into NY’s open. The pair’s bid persisted in early NY after the US current account misses big. A lift near 1.3585 ensued before the pair settled into a 1.3565/80 range ahead of the Fed. Post-Fed saw algos go wild. The lowered Fed 2014 GDP f/c and fewer FOMC members wanting a hike in 2015 sank US yields and the USD. EUR/USD spiked up to 1.3600. Offers into the 21-DMA & June 10 high halted the rise and a reversal in US yield losses then spiked EUR/USD down to 1.3548. Yellen’s presser gave no surprise hawkish comments and US yields slipped again. EUR/USD rebounded and sat just below 1.3590 late in the day. Risks to a bigger short squeeze grow post-Fed. Bears are frustrated that the downside is holding while spread widening abates and day/week RSIs turn up. Stops sit above 1.3605 and if run the 200-DMA & early June high (1.3565/75) are then targeted. A break there opens the door to a test of the 21-WMA (1.3727) and May 12 high at 1.3775.