Opened early Europe at $1.3186, EUR/USD closed in NY at $1.3217, the rate correcting away from a late recovery high of $1.3240, with news of S&P’s downgrading of Spain by two notches to BBB+ hitting the markets at 1700EDT which dropped rate to $1.31766 at the Asia open in very thin trading conditions. Rate recovered, settling within a range of $1.3190/1.3210 before easing down to $1.3185/95 after the BOJ announcement. Early Europe pressed EUR lower as this market reacted to the late NY Spain news, taking the rate to lows of $1.3158 after stops through $1.3170 were triggered. The pressure on the EUR took EUR/GBP to extended lows of stg0.81345 before strong demand for this cross emerged. Talk linking this buying to a European sovereign saw EUR/USD push up to $1.3200, the break above gaining momentum with Asian stops above $1.3220 then targeted. The level was triggered as the Italian auction result was announced with rate extending recovery to $1.3338 late morning (76.4% $1.3263-1.3158). A break here to expose Thursday’s high at $1.3263.
EasyForexNews Research Team