EURUSD: Euro choppy following FOMC Minutes. Focus turning to NFP, tomorrow.

The Euro fell to as low as 1.1800 in the hours ahead of the FOMC Minutes, before a mild bounce. The release of the minutes actually had minimal impact as they merely re-emphasized the message that the Fed had put out at the time of the meeting, although the Euro is squeezing a bit higher, to 1.1850, as I write.The Fed retained their optimism on the US economy while at the same time being concerned about the international outlook, low wage growth and inflation and appear to remain cautious on the timing of the first rate hike

Earlier in the day the EU inflation data came in mixed, with the Core figure coming in slightly above expectations (0.8% ; exp 0.6%) while the CPI headed into the deflationary zone, coming in at -0.2%; exp -0.1%). The EU unemployment figure came in as expected at 11.5%.

Technically the Euro is looking heavy still in the medium term, although the shorter term charts do hint at the chance of a squeeze to the topside. A downside break of 1.1800 would suggest a run towards 1.1743, where the Euro was initially pegged to the dollar in January 1999. Beyond here, we are likely to head to the 2005 low at 1.1640.

The topside should see good selling interest now at 1.1875, above which could head back to 1.1900. The hourlies are trying to turn a bit higher from an oversold condition, so if we do see any sort of squeeze, look for a return, above 1.1900, to 1.1975 (23.6% of 1.2569/1.1800) and possibly to 1.2000, where there is still a gap that needs to be filled from the lower Monday opening price. If so, there is no change in the view that it would be a good sell opportunity.

Today sees a bit of secondary data but the market will begin to focus on tomorrows US jobs data/NFP, so a choppy days trade close to 1.1800 would not really surprise. Use 1.118/1.1900 as a guide.

Economic data highlights will include:

German Factory Orders, EU PPI, Retail Sales, US Jobless Claims, Consumer Credit Change.

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