Opened early Europe at $1.2207, EUR/USD closed in NY at $1.2203, after recovering off session lows at $1.2166. Rate dropped back from an early high of $1.2210 to $1.2181 in opening Asian trade as market reacted to Moody’s downgrading of Italy’s bond rating. The dip met option related demand, with traders noting Asian reserve name with decent demand into $1.2150 underpinning. Release of Chinese GDP data, coming in better than the recent rate cut had forecasters fearing, boosted risk with strong demand for AUD leading EUR/USD to $1.22175, only for EUR/AUD sales to counter the move and take EUR/USD back to $1.2190. Rate settled around $1.2200 for the balance of the session, with traders noting this level holds the strike of a decent sized option expiry at the NY cut. Rate came under pressure in early Europe, dipping it below $1.2190 only for demand to reemerge and take it back above the figure. Upside momentum picked up into the Italian bond auction, extending recovery to $1.2219 on good results, before drifting back toward $1.2200.
EasyForexNews Research Team