Has Euro lost its funding currency status?

US missile attack on Syria this Friday morning triggered a flight to safety, pushing the traditional safe havens and funding currencies higher across the globe. 

EUR/USD trades comatose

Of particular note is the fact that the EUR/USD pair hardly moved following the US attack on the Syrian targets. The common currency has been referred to as a new funding currency, ever since the ECB hit the zero lower bound and started the QE program back in 2014/15. 

Thus, EUR/USD moved higher during the bouts of risk aversion (carry unwind). However, it has been a different story today. The pair remained flat lined around 1.0645 throughout the

Asian session. 

So has the common currency lost its funding currency status? The lack of upside in the pair despite risk-off could be due to Draghi’s dovish comments on Thursday. The ECB President squashed rate hike talk, leaving the EUR on a weak footing. 

Trump-Xi meeting

Trump-Xi meeting is likely to be a ‘quid pro quo’ event. The risk assets could regain bid tone later today if Trump-Xi avoid hard talk on trade and signal increased cooperation when it comes to taming North Korea. 

US wage growth

Amid all the US-Syria and Trump-XI noise, we will get the latest US wage growth figures. EUR/USD mat test key trend line support around 1.0590 if the wage growth number beats estimates and Trump-Xi meeting ends on a positive note. 

Non-farm payrolls number may not have much of an impact as a strong labor market is no longer ‘news’ to the market. 

EUR/USD Technical Levels

A break below the previous day’s low of 1.0629 would open doors for a sell-off to 1.0590 (support offered by the rising trend line drawn from Jan 3 low and Mar 2 low). A daily close below 1.0590 would signal the rally from the January low of 1.0341 has ended. The pair could then proceed to 1.0495 (Mar 2 low). 

On the other hand, a breach of resistance at 1.0667 (50-DMA) would shift risk in favor of a rally to 1.0738 (Weekly pivot) and 1.0760 (Mar 24 low).