EUR/USD faces downside risks heading into Friday trading, with the rate ending the week on a weak tone after printing lower lows. While the pair reclaimed 1.30 through the last European trade, a reversal in sentiment saw all gains given back, with negative mood exacerbated by a disappointing Apple (NASDAQ:AAPL) earnings report.
Buyers have bee running out of ammunition to rally the single currency this week, each day relying more heavily on positive news emanating from Spain or Greece. On the sellers side, it is more about a "half empty glass" or demerits of the euro on fading ECB OMT expectations to deliver in the short-term, coupled with bouts of risk-off, that keeps them on the lead.
On Thursday, EUR/USD found technical base at 1.2920, a level coming increasingly into danger this Friday. There has been market commentaries on stops clustered below 1.2915, while sellers still thought to be camped at the 1.30 mantle.
At this stage, either 1.30 or 1.2920 should give up in order to achieve some further definition, although a pick-up in volatility is unlikely, as all remains pretty much unchanged, with no immediate threat of major technical breakouts unless 1.28 or 1.32 go.
According to FXWW Founder Sean Lee, "EUR/USD remains choppy inside well established ranges and its currently being used as a vehicle for the crosses, rising on EUR/JPY buying then falling back on EUR/GBP selling. The focus is definitely elsewhere so EUR/USD traders should stay in range trading mode overall and of course watch for big stop-loss levels.
In a daily research note, Vassili Serebriakov, currency strategist at Wells Fargo Bank comments: "Overall, most currencies continue to trade within their recent ranges and we see few immediate catalysts for strong directional FX moves."
On the fundamental front, advance 3Q GDP data in the U.S. and the final reading on the October University of Michigan survey of consumers is on offer as risk event later today, which may provide short-term spikes on the pair depending on the data.
Looking further down the road, unfortunately for volatility seekers, the next big catalyst on a possible major technical statement in the fate of euros and U.S. dollars is not expected until next Friday, when the U.S. reports the jobs number. Before the labour print, only headlines out of the EU on a Spain rescue resolution may act as another big market mover.