The reflation trade is seeing profit-taking across the board with the poor US housing starts being used as a catalyst. Stock futures have given back their early gains and JPY crosses are lower across the board. EUR/JPY had given significant ground even before the figures.
I still contend housing starts should go to zero as the market works off its glut of both unsold new and existing homes but for some reason many still look at the soft starts as a bad thing for the economy…
1.3575/80 is support for EUR/USD on dips near-term. Expect small stops below that level.
The 1.3655/70 is shaping up as formidable resistance near-term as we shed gains.
