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.

 

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. 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. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.