EUR/USD — Finds Demand Off Lows Ahead Of ECB

The pair found demand off a critical swing low at 1.1345–50, which one could cross reference to see how relevant it’s been on the most recent price interactions (Dec 24 low, Jan 2 low). The flattening of the 5-DMA at a time when the slow stochastic is entering an overbought territory is another sign that the tide of sell-side commitment may have matured, especially in the context of such a rotation market profile for the last few months. Add into the mix that the German vs US 5-year bond yield spread as proxy of the capital flows entering EMU, US continues to show macro divergence, and one could make a case that justifies buying EUR weakness from the low levels it bounced off this week.