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ridethepig | EUR Market Commentary 2020.06.23

アップデート済

📍 EURUSD breaking out of the consolidation/chop and starting to tactically move higher.

As you all have noticed, volumes are a lot lighter as markets catch their breath back. The two clashing forces on the risk front remain set to hijack the flows at any time:

1️⃣ an increasing R0 / case numbers and;

2️⃣ re-openings / economic surprises.

Overshoots on the European PMIs front this morning will be enough to trigger the final momentum leg. For those tracking the live flows in FX, invalidation in the current leg higher would come from a close below the 🔑 1.115x support in EURUSD.

Thanks for keeping the support coming with likes, comments, charts, questions, 👍or 👎 !!

ノート

Markets enteing into risk-off mode as virus cases continue to spike higher. With Quarterly end flows (and value month end) the USD may potentially become the place to park. In life it’s ok to take cover under a table every once in a while if the storm hits shore… Not giving up on the bullish euro view at this juncture but lightening up and will try to fade dips into 1.118x. We need to remain nimble, if US avoid another round of lockdowns then the USD will roll back around.

ノート

As we enter into an important Weekly closing ahead of Month and Quarterly end flows, EURUSD is starting to put in a basing formation. Of course immediate risk to the ST thesis comes from recent escalation in virus cases. I am cognisant that the market could broadly park capital in USD next week and outguess further US lockdowns on the horizon, but given that we are already considerably off the highs, any dips into support should be bought. On the technical side, strong support located below at 1.117x and 1.115x while to the topside taking 1.125x soft resistance today will confirm the lows are set and unlock the infamous 1.15xx next week.