EUR/USD posted an early high of $1.2779 into Asian dealing before reversing tack, one trader suggesting that the EUR seen vulnerable as traders turn attention toward end of week Spain and Italy bond auctions, as well as the ECB rate decision Thursday. US macro sales were cited for providing the early downside pressure, with rate also pressed lower as stops through Chf0.9500 in USD/CHF were targeted and triggered. Rate met support at $1.2750/45 from European corporate demand, but leveraged selling eventually provided the weight to take EUR/USD through $1.2740 and on to a low of $1.27285. Rate recovered, drifting back to hold above $1.2750 into the European open. Reports of strong sell interest placed above $1.2800, which helped to cap yesterday’s extended rally at $1.2819, seen countering upside enthusiasm, with traders still looking to go short while rate remains below the 2011 low at $1.2858. Traders mention talk of decent demand interest underpinning in the $1.2710/1.2690 area.
EasyForexNews Research Team