GS: EUR from trading – The market seems to be looking for a beat on US Retail Sales , though positioning after yesterday’s Kuroda induced cleanse is very low and it’s been a while since EUR/USD lost its status as the most favoured expression of dollar bullishness .
EUR/USD positioning is probably as low as it has been since last summer . Until the data release it will be the familiar pattern of tracking Bund yields and Greek headlines ; the former trading quite firmly as we open . I am generally positive on the dollar but wonder (mindful of the NFP reaction) whether the easier trading opportunity is to play Euro topside on a weak release and in the event of a strong outcome to get long of USD/JPY given greatly reduced participation . Overall I do prefer playing a positive dollar theme but think we are in a mode where flexibility is at a premium . Support expected at 1.1215 (Tuesday’s low) and on a big positive surprise back towards 1.1100 ; whilst last week’s and this week’s 1.1380/87 double top represents the initial resistance point protecting the 1.1468 cycle high .
Citi: Spot EUR: All set for the data
The whole market has been waiting for today’s retail sales print out of the US, which is important for our understanding of the US Economy after the Q1 slowdown. One is not a trend, so today’s report will need to be strong in order to build on the momentum from last week’s NFP data. Spending has been very slow to recover so the control group reading will be closely watched to prove that the slowdown was not secular. The headline print is poised to come out strong with the recent surges in auto sales and rebound in gasoline.
A control group reading above the 0.5% consensus would be positive for the USD going into next week’s crucial Fed meeting. I think that we will touch either side of the recent 1.1050 to 1.1385 range, depending on the data print. I plan on going into the data short Euros as last week’s NFP report saw a higher-than-average increase in retail employment, which should filter through to today.