Closed in NY Tuesday at $1.2503, after seeing pressured lows in this session of $1.2461 after market reacted to a further downgrading of Spain by Egan Jones (or at least that was attributed as the trigger). Rate came under renewed pressure into Asia, markets seemingly reacting to an FT report suggesting that the ECB had rejected the Spanish bank recapitalization plan, which extended the rate’s corrective pullback from the late NY recovery high of $1.2510 to $1.2476. US name demand emerged but an attempted recovery faltered around $1.2485 as move met private bank supply (option related, Asia cut). Release of worse than expected Australian retail sales data dented risk and took EUR/USD through the NY base, triggering CTA stops under $1.2460, before basing at $1.24572. Rate recovered in afternoon trade to $1.2473, opening Europe around $1.2466. Decent demand interest is seen in place ahead of a barrier at $1.2450, with large stops noted on a break of $1.2445, more from $1.2440 through to $1.2410. Resistance remains in the $1.2500/10 area. Headlines remain the key driver.
EasyForexNews Research Team