Closed in NY at $1.2865, the corrective pullback from session highs of $1.2913 given added weight by the late downgrade of Spain by S&P which saw it trade to a low of $1.2862. Rate saw fresh supply into Asia, as markets continued to react to the S&P move, knowing that Moody’s decision on Spain is awaited. Rate met initial support at the $1.2840 level before recovering to $1.2860 only to get knocked lower again as markets reacted to the release of Australian jobs data, prompting further euro-Aussie long unwinds. Rate triggered minor stops on the move below $1.2840, extending lows to $1.2826 before basing, traders aware of support in place linked to the 200-dma at $1.2823 (support seen down to $1.2800, covering Oct1 low at $1.2804). Rate drifted higher, driven in part as short term Asian spec shorts were squeezed, the demand taking the rate to $1.2874 before settling around $1.2865 into Europe. Eurozone inflation data the morning’s focus, along with an Italian bond auction. Traders will watch for any comment from the Troika/IMF on Greece. US jobless claims the afternoon interest.
EasyForexNews Research Team