EUR/USD Crashes Through Range Support as EUR/JPY Loses ECB Low
- Euro complex under pressure across the board.
- Forex economic calendar lighter in North America on Tuesday.
With the 'weak hands' cleared out, the Euro market is back to trading based on current data trends, which hasn't proven that helpful for the single currency. What we mean by 'weak hands' is the group of market participants who were trading short Euro specifically for the ECB's meeting on Thursday - and who were undoubtedly knocked around after the Euro's furious rebound after Draghi's press conference.
Yet with significant range tops in the major EUR-crosses having held yesterday as resistance (very cleanly, to be noted), we've now witnessed a complete reversal - of the ECB reversal. The EURUSD has pivoted back through $1.3585, queuing up another shot for a move through $1.3500 so long as the USDOLLAR Index holds above 10495 today.
Elsewhere, EURJPY has broken its post-ECB, post-NFP swing lows near ¥138.65, and in light of the observation that the JPY-crosses haven't traded that tightly with surging global equity markets, we suspect that even a light down draft in risk sentiment could stoke a disproportionate move of strength by the Yen.
--- Written by Christopher Vecchio, Currency Analyst
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