Opened early Europe at $1.2075, EUR/USD closed in NY at $1.2060 after a late NY sell off saw rate trigger the reported barrier at $1.2050, touching a low of $1.2042 before recovering to $1.2070/75 on reported Asian sovereign buys ahead of the close. Early Asia was confined to $1.2055/70, marked a low at $1.2054 before getting a lift as the Aussie bounced after initial react to local CPI data, taking EUR/USD to a session high of $1.2080. Rate settled between $1.2070/80 ahead of the European open. Rate came under renewed downside pressure into early Europe, the rate squeezing back to $1.2054 before it spiked to $1.2115 on initial reaction to ECB Nowotny comments that he sees arguments for allowing the ESM a banking license. Asian sovereign and macro sellers were quick to knock rate back to $1.2075, but dip attracted stronger buying. Rate moved up to retest the $1.2115/20 area, meeting stiff resistance until it finally gave way allowing rate to extend rally to $1.2136. Short covering cited as the main factor for the recovery, though underlying tone remains negative.
EasyForexNews Research Team