HSBC Spot Desk – EUR View

 EUR$ –  At these levels, I maintain my bias to be short and to add on rallies.  Yesterday’s price action was telling –   EUR genuinely traded heavy despite the disappointing US retail sales number.  The retracement from 1.1090 to 1.1000 was a sustained,  considered pressure – not just a clear out of short term buyers.  Just a few weeks ago, people would have been buying into EUR strength – which extended moves by another 100 points.  Now however,  it seems that the mentality has shifted to sell into EUR rallies.

Ahead of HH this afternoon,  I still think the risk is for a more hawkish tilt.  With Grexit fears diminished and encouraging Chinese data last night –  global risks are dissipating which puts the Fed back on track. I remain short EUR here,  will add at 1.1030 with a full stop above 1.1065.  I will add on the break of 1.0960 with the belief that it opens scope for a move to 1.0850 rather quickly.

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