Closed in NY at $1.3115 having pulled back from an extended recovery high of $1.3172 before pulling back to $1.3092 ahead of the close. Return of Japanese markets, following their Monday holiday, saw decent selling of euro-yen emerge as markets reacted to the closure of Japanese companies in China due to the recent unrest. This weighed on Japanese equities, the sales of euro-yen taking euro-dollar off an early recovery high at $1.3119 to $1.3090. The move lower was also aided by the initial negative reaction of Aussie to the release of RBA Minutes. However, the recovery in Aussie led euro-dollar to a recovery high of $1.3114 but momentum quickly faded and allowed for another drift off to the $1.3095/90 area. Rate had lifted back above $1.31 into early Europe. Hopes Spain will eventually ask for ECB bond buying help provides underlying support but the longer they hold back then expect to see some paring of spec longs. Bids $1.3090/80, a break to open a deeper move toward $1.3060/50. Resistance $1.3120/30, stronger on approach to barrier interests at $1.3175 and $1.3200. ZEW 0900GMT.
EasyForexNews Research Team