All eyes on EUR/USD today and the pivotal 1.1300 level
Traders will be focusing on the 1.1300 level in EUR/USD today which has been a key pivot for the currency pair despite overwhelming reasons to maintain the bearish view on the Eurozone and the EUR thereon. Yesterday, ECB member Coeure reiterated that downside risks have tilted to the downside, but this is already something well ingrained in traders minds, though demand at these lows is unmistakable.
We have to remember that for all the speculative reasoning behind a lower EUR, demand for the currency will continue to some degree, with the major European states some of the major global exporters in the world.
Also of note is the strong support seen in EUR/CHF in recent weeks and months, and as is widely acknowledged and accepted, the SNB is openly prepared to step in and arrest any excessive strength in the CHF, so their smoothing operations will also have had an impact. Watch the EUR/CHF rate alongside EUR/USD, with the cross rate now testing the lower half of the 1.1300's - next support comes in from current levels down to 1.1310.
For EUR/USD though, sub 1.1300 still sees more support levels to negotiate, with 1.1250-70 the next area sitting in front of the 1.1215 lows from mid Nov. Friday markets can also see some profit taking interest and we note a high degree of USD buying seen over the last 4 days, which may be reversed in some part later on.