Nice EURUSD volatility - but without a direction

Good intraday volatility triggered by good Euro area PMI flash releases, taking the pair up almost 100 pips throughout the European morning session, just to be halted by a notch higher core consumer prices in the US. That release gave room for a 60 pips dip, which shorts saw as a relief and a possibility to reduce their positions. Up we went again and this time around with stops above 1.1000 – just to peak a bit lower than the high of last week.

Someone decided that neither of this made any sense and settled for a more decisive move south – taking us to a new low of the day.

I think that was seen as enough runs for a day’s session and the steam run a bit out of the pair into NY lunchtime.

There could be a bit more of the same tomorrow when we get German IFO which could be good reading and the later US Durable Goods Orders, which is more of a question mark.

While the Euro see more of support on lower levels, I would think “troubled” shorts are up and dealt with. Most of them were likely closed out Wednesday last week and some latecomers were likely done on the move above 1.1000 today. If so – the landscape is more of an open play field with more equally strong teams playing. That opens up for nice moves both ways – possibly as high as 1.1250-1.1450 should Greece faint from the daily headlines and down to 1.0650-1.0500 should they remain there with renewed focus on their liquidity position.

I still see EURUSD bulls as being pretty absent and that the teams are predominantly made up from shorts being comfortable staying so and shorts being more vulnerable. I think we need more of figures confirming the positive impact on Euro area macros and inflation from a lower euro before bulls are back.