EURUSD View: FXWW

From the FXWW Chatroom – EURUSD’s overnight kneejerk move higher has yet to abate as the market re-calibrates risk after Fed Chair Powell’s comments. It is that time of the year when pain rules and crowded positions will get forced out on news, illiquid conditions and end-of-year risk aversion. The market remains bearish on EUR given cautionary pre-ECB meeting remarks, underlying data and trade war uncertainty. The prohibitive cost of carry running long EUR positions is another problem. If the Fed turns cautious despite the clear disparity between the two central banks, I’d expect moderate short covering. I don’t sense any real pain below or above the 1.13 handle nd the market needs something more concrete to act upon. Prefer trading the 1.1300-1.1400 range but be cautious given month-end activity on Friday and the G-20 summit over the weekend. Place stops either at 1.1270 or at 1.1430. EURUSD is supported at 1.1360-70 before 1.1320-30 and 1.1290-00, while resistance lies at 1.1390-00 ahead of 1.1430-40 and 1.1470-80. (UBS)

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