Euro remains resilient in Asia

The main theme in the FX space was a risk recovery on the back of the ECB’s stimulus measures. 

Yesterday I ran a few scenarios on how the euro might play out and the one that came to fruition was a momentum play on a break of 1.3600. The pair traded down to support at 1.3500 where buyers returned to the market and managed to push the pair higher. It’s been a muted Asian session for EUR/USD with the pair hanging around 1.3661 and little changed. While it has exhibited some strength since the meeting, I feel this merely presents fresh selling opportunities at higher levels. The 200-day moving average comes in just short of 1.3700 and I feel it’ll present some resistance. Perhaps some offers will start coming in at around those levels.

On the European calendar today we have German trade balance, industrial production, French government balance and trade balance. All these readings are unlikely to have too much of an impact. Instead, we are more likely to see some activity on the USD side of the equation. The USD has been subdued over the past 24 hours but this could all change if we get a solid non-farm payrolls print. USD strength would have a net negative impact on the pair.

 

The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.

Find articles by analysts