Release Time:2019-06-17 06:00
EURUSD (1.1267) • It seems to be a case of two steps forward and one back for the EUR which is struggling to maintain last week’s gains. Eurozone growth and fiscal concerns have weighed on sentiment through mid-week and recent data trends have challenged the mildly constructive narrative that the ECB President Draghi laid out at this month’s ECB meeting. Weakening inflation expectations are a challenge but we continue to think policy makers are still some way off from taking any sort of position on renewed stimulus. We still think the EUR can advance—more as an anti-dollar trade—in the near-to-medium term. Around EUR4.4bn of 1.13 strikes expire at 10ET and may add to the EUR bid tone this morning.
EURUSD short-term technicals: Neutral/bullish—EURUSD has consolidated last week’s gains and while the drift back from its midweek peak looks somewhat disappointing, we are not entirely surprised by spot drifting back to the upper 1.12s—to effectively retest both the double bottom breakout on the daily chart (targets 1.1425) and the trend resistance break on the weekly chart. Sustained losses below 1.1260/65 intraday and a soft close on the week would be more of a concern, however.