From the FXWW Chatroom – EURUSD price action yesterday was telling. After a quick vicious rally to 1.1622, which caused a lot of questions from the client base, the market seized on the opportunity to sell. As much as the market might be tempted to sell USD, it feels like everyone keeps coming back to the fact that US data is strong, yields are attractive and USDCNH is slowly grinding towards 7. Spooz stopped the rot with a great rally yesterday and some solid earnings in the US, so all is well with the world.
Looking forward, today should be busy with the final Eurozone CPI print out at 10:00 BST and Fed minutes due this evening. With equities stabilizing, its likely that the tone will still be hawkish and the USD will keep chugging along.
I am still short EUR after selling the pop yesterday. The key level to watch on the downside for confirmation of a larger move is 1.1535. I am hopeful for a breakout which will garner some more interest in the USD and FX more broadly. Stay tuned sports fans.
Support: 1.1550 (overnight pivot), 1.1535 (Friday’s low), and 1.1433 (last week’s low)
Resistance: 1.1622 (yesterday’s high), 1.1627 (100 DMA) and 1.1650 (Sep 28 high)
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