EUR/USD had a very mild upside bias today as fallout from the Russian announcement that it is accumulating JPY reserves helped weigh on USD/JPY and drag the other majors marginally lower in its wake. EUR/JPY tested 149.00 before bouncing back, giving the EUR a modest bid into the close. Mixed talk from various Fed speakers netted out to more of the same on balance: the Fed is on hold but with a tightening bias. 1.2538 was the intraday top today while EUR/USD held above 1.2500 throughout the US session. 1.2485/90 is key near-term support while 1.2460/75 is more significant medium-term support.
ZEW is on tap for tomorrow morning and will be particularly influential if weak. If strong, the market will likely wait until after the TIC data to trash the USD. TIC inflows were sub-par last month and after a $70 bln trade deficit last week, another short-fall will prompt heavy short-covering in EUR/USD. Stops above 1.2600 are eyed while more are seen on the downside on a 1.2450/60 break. US industrial production is out tomorrow and capacity use will be closely eyed by economists. With unemployment low, tight cap u will keep the Fed on guard.
No comments:
Post a Comment