EURUSD – Ready to Break 1.2200?

EURUSD – Ready to Break 1.2200?

Chart Of The Day

EURUSD has flirted with 1.2200 support for several days now. The level is critical as it represents a quadruple bottom all the way from 2017.
There are however good reasons to think that the pair may ready to break that key support level.

As US rates are climbing through the 3% level the ECB is getting left further and further behind. IFO economists predicted today hat German GDP would increase at 0.4% versus 0.6% rate of Q4 which is consistent with the latest PMI reading from the EZ.

The news is likely to keep ECB firmly neutral in its monetary policy stance on Thursday and the single currency could see further weakness if President Draghi suggests that the central bank many not consider tightening rates until well into 2019. 

If 1.2250 is given, the shorts will target 1.2000 as the next level of decline.

EURUSD Slides Back – 1.2200 in View

EURUSD Slides Back – 1.2200 in View

Chart Of The Day

The euro slid lower in NY session today ending on the lows of the day as it flirted with the 1.2300 level. There was no specific news to drive the currency lower, but the rise in US 10Y along with the fall in GE 10Y yields helped to push the pair lower and the overall tone in the trade suggests that the pair could tumble lower as the week comes to as close.

As we noted earlier, “The concerted effort by ECB officials to talk the euro down indicates the realization by policymakers that the persistently high exchange rate for the currency is having deflationary impact on price levels. And while ECB officials are not considering any overt intervention measures, the form of soft jawboning is clearly an attempt to slow down the rise of the euro and keep it below the 1.2500 mark.

By all measures, the euro should be lower as interest rate differentials between US and Europe continue to expand, but chaotic White House policy, muted inflation data and so far sub-par growth in 2018 has cast doubt on the ability of the Fed to follow through with its hawkish talk.

Still, the much more adversarial tone of the Trump administration towards trade has forced EZ monetary authorities to pay careful attention to exchange rates, as businesses on the Continent are becoming increasingly concerned about punitive measures by Trump, that why they are likely to talk the unit down even as it declines, hoping to push it to 1.2200 or below

USD/JPY – A Retest of 122.00 Highs?

USD/JPY – A Retest of 122.00 Highs?

Chart Of The Day Uncategorized

Fundamentals
Although the US labor markets have started to slow and US data overall has shown some disappointments as of late, many traders in the fixed income markets remain convinced that the Fed may consider a rate hike as early as June. The US 10 year yields have started to rise and that has put the bid back into USD/JPY which recovered the 120 figure and looks ready to test the recent highs at 122.00 Tomorrow’s FOMC minutes could offer a clue as to how the Fed is leaning and if the tilt is hawkish than the pair has more upside left.

Technicals
USD/JPY has found strong support at the 118.00 level and has now made a higher low at 119.00 but the 122.00 overhang still provides considerable resistance. A break above however could target the pair to 125.00 over the medium term horizon.