EUR/USD Still Finding Sellers Into 1.1400 - 1.1430-35 Resistance Not Giving Up
Yesterday we saw an attempt to break 1.1300 in EUR/USD, taking the single currency to new lows vs the USD as the greenback continues to draw in buyers relentlessly. Support here emanates from the key levels seen down to 1.1275-85, which represented the breakout point when EUR/USD eventually pushed into a 1.1500-1.2500 range (give or take).
As a result, we could see a little more 2-way trade at these levels, and the market is certainly not giving up its intentions of testing this again, with the strong USD backdrop serving to back up moves all in this direction. Traders should realise however that the summer months are relatively thin in liquidity terms, so sell orders in the 1.1430-35 area will have a stronger presence in the market at the present time. We have since seen gains towards 1.1400 faded around the figure level and we are battling to test lower again.
Against this, we also have EUR/GBP which is still trying to push up towards 0.9000 again and this is lending support to EUR/USD and weighing on Cable at the same time. Mixed signals for both as a consequence, so range trading is set to continue.
One piece of data worth noting is the higher than expected EU trade balance for June, which has come in at 22.5bln vs 18bln expected, so the weaker EUR is having a positive impact on Eurozone exports. This may well develop into stronger EUR support further down the road, yet the market has only got eyes for the USD near term.