EUR Trading Outlook (20-06-2014)

EUR/USD Short covering for EUR bears (particularly vs. GBP) drove EUR/USD above 1.3600 in Europe and tripped stops. Follow through saw a 1.3644 high before the pair pulled dipped near 1.3615 into NY’s open. US bond yields were soft early on and the USD was generally offered. NY initiated their own rally but could only manage 1.3640. Spec & macro offers in the 1.3640/50 zone were too much to overcome. US yields recovered early losses & turned positive for the day while US equity mkts swooned. EUR/USD slid from NY’s high but stalled at 1.3603 as that old 1.3600 resistance now turns to s-t support. Further support sits 1.3560/70 where s-t spec t/p bids and the 200-hour MA sit. The pair is still consolidating in the post-ECB 1.3500-1.3680 range. This should resolve itself to the downside eventually but the break may have to wait. The market remains short EUR and day/week RSIs are in the process of unwinding recent o/s conditions. No major data is due into the weekend so it’s likely the pair will stick within current ranges.