The 1.1500 Level Looms Large For The EUR/USD
Shain Vernier • 2 min read
Psychological levels have been the theme today, with WTI crude and the EUR/USD trading very near big-round-numbers. For WTI crude oil, $75.00 is the 2000 pound elephant ― the EUR/USD features 1.1500 as the premier price point. At least for the last week, both markets have been tied to these levels.
A bit earlier, several U.S. Treasury auctions were held. All eyes were on the results as growing yields have defined the recent trend in debt market pricing. Here is a look at today’s action:
Item Actual Previous
3-Month T-Bill 2.220% 2.175%
6-Month T-Bill 2.380% 2.335%
Rising yields are the new norm, with institutional players electing to integrate U.S. government debt into their portfolios. The result has been a weakness in stocks, with both the DJIA and S&P 500 trading into the red.
The forex session has been hotly contested and mixed for the Greenback. Losses against the British pound, Australian dollar, and Japanese yen have been the downsides. One of the lone bright spots for USD bulls has been a drop in the EUR/USD.
Overview: At the moment, the EUR/USD is range bound near the 1.1500 handle. This market remains in a technical downtrend, with buyers failing to mount a challenge to the late-September/early-October sell-off.
It is likely going to take a fundamental market driver to move the EUR/USD off of the 1.1500 peg. The coming days have a few scheduled. U.S. inflation will be addressed tomorrow by the PPI report, followed by Thursday’s U.S. CPI metric.
Thursday’s U.S. premarket hours bring a release of the ECB Monetary Policy Meeting Accounts. Traders will be tuned in, looking for clues on future ECB actions as well as pending fallout from the evolving global trade situation. All in all, this market may look very different by Friday’s closing bell.