EUR/USD finally takes out 1.1500 - ranges to free up?
After a number of attempts, we have seen EUR/USD finally taking out the 1.1500 mark, which has served as a firm cap for the lead rate for a number of weeks now. Indeed, we have to back to early Nov when we last saw price briefly touch on this level, after which we then went on to hit lows of 1.1215.
The catalyst of the move is largely as a function of market adjustment to Fed fund futures pricing out hikes for 2019, and to a larger extent, we have seen limited reaction to the USD in this respect with losses linked to the risk related and safe haven currencies as and when the mood in stock markets change.
USD/JPY has fallen to lows under 105.00 - albeit with the help of illiquid markets last week - but the downside has been clear to see in the run-up to this. Thereafter, we have seen the USD losing ground against the likes of AUD and CAD, with USD/CAD specifically impacted by the strong recovery in Oil prices.
As such, there has been a case for EUR/USD falling behind, though due to the weakness in the Eurozone economy, any major extension to the upside is likely to be limited. Pre 1.1600 is likely to draw in fresh selling should we make it up to these levels, though naturally, we also have to be mindful of the stops seen through here also.