Euro in focus as leaders meet

FX markets are choppy heading into the end of the week with a raft of policymakers set to hit the wires.

Source: Bloomberg

EUR/USD is the pair to watch today as Greek PM Tsipras meets up with Hollande and Merkel in Riga. This could pave the way for a deal to be struck late May or early June. EUR/USD is just holding on to support in the $1.1100 region and it seems we are headed for a binary event. There is a compressing triangle which could really swing either way but the more dominant line is a downtrend which can be drawn from July last year and capped the recent move towards $1.1500. The recent drop found support at the 38.2% retracement of the April to May rally which comes in at about $1.1100. Sellers could consider opportunities in the $1.1240 region which is the 23.6% retracement of the same move. This weekend we also have the ECB forum on unemployment and inflation. This will deserve some attention with central bankers including Mario Draghi, Mark Carney and Haruhiko Kuroda speaking. On the US side, Janet Yellen speaks on the US economic outlook. Traders are expecting her to clarify some of the comments from yesterday’s minutes. The debate of September or December lift-off will continue and April CPI out of the US also deserves some attention.


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