Opened early Europe at $1.2240, EUR/USD closed in NY at $1.22361, having seen extended lows post less dovish than expected FOMC Minutes release, of $1.2212. The move lower took out option barriers at $1.2230 and $1.2220, but stronger demand ahead of the larger barrier at $1.2200 cushioned. Rate in Asia initially edged to session highs of $1.22481 before risk took a knock from the surprise 25bp rate cut in S.Korean rates, along with release of weak Australian jobs data (though this was rumoured Wednesday). EUR/USD dropped to $1.22237 before settling back between $1.2235/45 ahead of the European open. Rate came under further pressure into European dealing, eventually breaking below Wednesday’s base at $1.2212 to post fresh 2-year lows at $1.2208. Again option linked demand cushioned the move with a paring back of shorts allowing rate to edge back around $1.2220. Suggestion that barrier structure at $1.2200 is a digital, which rolls off today, seen keeping rate anchored, as well as traders noting a large $1.2230 strike option to mature at the same time.
EasyForexNews Research Team