Euro Still Headed Lower. Target 1.05

FX:EURUSD   Euro / U.S. Dollar
197 0 2
Overnight we saw some positive trade balance data out of Germany, with exports rising 0.5% higher than consensus to 2.6% yoy and imports rising much higher than expected to 3.6% vs. an estimated 0.9%. Euro             rallied throughout most of the European session, until 8am when Reuters published an article claiming the ECB was considering a much larger deposit rate cut. "Three of the ECB policymakers said debate is now about the size of the rate cut with some arguing that a 0.1 percent reduction, already priced in by markets, would have little impact. Two policymakers said the bank should go for a bolder move, in line with its recent tradition of delivering policy moves in excess of expectations."

I believe the Euro             will continue to grind lower and I believe the market is currently underestimating the ECB's commitment to a much weaker Euro             , irrespective of what the Fed does or doesn't do. Euro             seems to have found temporary support out of thin air. Given the Euro's usual reaction to "risk off" days (carry traders cover their Euro             shorts), for which today was a massive one, Euro             didn't really move. Had it not been for the Reuters article, I think we would have seen a move much higher. At 1.075ish, there really aren't any historical levels to support the price and I see a re-test of Friday's lows on the way to prior support at 1.0660. Longer term, I think a re-test of last Spring's lows at 1.05 are on the cards.

Over the weekend, I performed some analysis on the Euro futures             market and had some interesting takeaways. Have a look here for the full analysis:
Comment: I added some additional analysis on trading patterns for Euro bears. The important take-aways are:

1. Cover shorts/take profits during the 3pm hour
2. Expect positive price moves after-hours from 4pm to 4am
3. Look to add exposure opportunistically overnight, ahead of 4am
4. Cover shorts/take profits ahead of 10am, around 9:45am
5. Look to add exposure during the 10-11am hours, ahead of 11:15am

The full analysis can be found here:
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