Little fundamental change today in the bigger picture for the EUR/USD outlook, similar to Yesterday, and ahead of the US ISM data & Employment report (Wednesday & Friday respectively) the broader 1.2650/2750 range is expected to contain the majority of short-term fluctuations.
Intraday the poor German Retail Sales data weighed on the Euro and EUR/USD was sold back to 1.2680. However, the drop is seen as an effect of the up and coming German VAT hike, rather than a reflection of any other factors. Solid bids helped prop and spot formed a 1.2680/2700 band into the Euro Zone inflation data.
Talk of central bank bids into 1.2675 dissuaded further short-term sales while below a supranational is tipped on the bid at 1.2650. EZ HICP slowed to +1.6% Y/Y (against the expected +1.7% Y/Y) but the dip was offset by the better than expected EZ Sentiment indicators (Economic Index 110.0 Vs 109.3 Pvs).
Offers are seen at 1.2700/05 from CTA's & other prime names with more sellers at 1.2740/50. Looking ahead, NY NAPM is set for release at 14:00 GMT and Chicago PMI & Consumer Confidence at 15:00 GMT (all October).
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