Closed in NY at $1.3032, off session lows of $1.3011. Strong demand for dollar-yen into the Asian session weighed back on EUR/USD, as EUR/JPY met resistance on approach to Y109.50, with rate pressed down to lows of $1.30041. However, rate met strong demand, said to be sitting ahead of decent sized option barrier interest at the figure, with recovery through $1.3030 squeezing out weaker shorts that had been positioned for a break of $1.3000 and an expected triggering of stops below. The added buys extended recovery to $1.3056 (61.8% $1.3088/04), the move taking EUR/JPY to extended highs of Y109.63 before this rate reversed lower as yen pared back early Asian losses. EUR/USD was holding firm into the European open, currently trading around $1.3045, EUR/JPY back at Y109.42 and dollar-yen at Y83.83, off highs at Y84.17. The dollar demand from reported ‘QE3’ unwinds, prompted by the recent FOMC announcement, continues to provide the main market drive via UST yields.
EasyForexNews Research Team