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Portuguese Debt Calls Up Euro Price Action

A few things worth nothing today:

As is typically the case ahead of any release expected to reign in volatility, EUR/USD hit the breaks at a major technical level (spike base). I was in the trading room shortly after the nonfarm release on Friday, discussing how USD/JPY stalled at the 3/4 pull zone (76-78% retracement) right before the release. Failure to make higher highs / lower lows is common ahead of these because simply stated: who the hell wants to be buying into something seconds before a high-risk event?

Expectations and rumors were flying extraordinarily high ahead of today's auction, and we saw a good old fashioned example of “buy the rumor, sell the news” get triggered. Overall, it was successful, though not quite living up to the insane expectations of the rumors that preceded this:

Portuguese Oct’14 auction sells EUR 650mln, 3.6% bid/cover 2.6 vs. Prev. 2.8 (yield 5.396% vs. Prev. 4.041%)
Portuguese Jun’20 auction sells EUR 599mln, 4.8%, bid/cover 3.2 vs. Prev. 2.1 (yield 6.716% vs. Prev. 6.806%)

Add to actual auction expectations was confirmed rhetoric from the EU discussing further bond purchasing / added aid for Portugal — it's one factor that has been stabilizing the currency on a short term basis. 15 min local technicals are below — just the basics — spike base is at 1.3035. Keep referencing these on your charts; subsequent price action can also be determined simply by using these and diagonal trendlines as a reference: