Closed in NY Friday at $1.2289 after seeing a late corrective spike that took rate from $1.2242 to $1.2317. Rate opened into early Asia around $1.2283 and continued to drift to a low of $1.22615 before meeting strong US name buying which bounced rate back to $1.2290 with momentum taking it on to $1.2301. Rate settled around $1.2300 into early Europe. O-Bon week in Japan has acted to keep markets on a subdued note (affects corporate activity) with markets remaining in wait mode for developments in the ECB debt aid plan. Disappointment that no easing announcement was seen from PBOC over the weekend has dampened the risk-on tone, though Friday’s comments from Fed’s Williams in favour of QE3 were seen providing the counter. EUR/USD bids seen into $1.2260 (76.4% $1.2242-1.2317) with stops below, a break to open a retest on stronger support into $1.2240. Offers seen back in place above $1.2310 through to $1.2320 with stops above $1.2325. Further offers then seen at $1.2345/50. A very light data calendar so expect moves to be headline reactive.
EasyForexNews Research Team