Closed in NY at $1.2697, after recovering off session lows of $1.2688. Rate came under early sell pressure by a major French bank, the weight of sales hitting a thin market that took rate to lows of $1.26661. Move was seen to take out stops with rate recovering initially to $1.2685 before lifting to session highs of $1.2708 ahead of Tokyo open. Fresh sales emerged into this session from macro and momentum accounts, the supply taking the rate back below $1.2700 before meeting Norwegian name demand (for $/Sek) at $1.2695. This demand was quickly filled, the rate meeting support at $1.2670 before recovering back to $1.2690. US names and a Japanese securities house then emerged into the European open to take rate through the earlier spike low, extending the base to $1.26542. Reported demand at $1.2655/50 cushioned the move though recovery efforts so far remain shallow, the rate trading around $1.2668. Option barrier interest at $1.2650 expected to draw defensive demand ahead, a break to expose the 2012 low at $1.2624 (Jan13) with digital option interest at $1.2625 still live. Ugly if we break $1.2624.
EasyForexNews Research Team