Rate had failed to extend post NFP highs above $1.3040 in NY, the rate topping out out at $1.3039 before the pullback. Early trade into Asia saw rate contained within a tight $1.3011/19 range before it picked up demand on the back of another round of strong yen sales, the continued rise of euro-yen providing the momentum for traders to target the recent high at $1.3040, barrier at $1.3050, as well as the stops above. The move extended on to $1.3068 before momentum faded and rate drifted back toward the broken resistance level at $1.3040 ahead of Europe (40-dma $1.3037, CTA’s like this average). Yen continues to provide the key directional impetus, the pullback on dollar-yen and euro-yen from Y99.66 and Y129.94 respectively prompting the mentioned pullback on euro-dollar. Germany trade balance and C/A due for release at 0600GMT, followed by BOF business sentiment and French trade data at 0645GMT provide the morning data interest, with a light US calendar for this afternoon. Offers now seen into $1.3065/75 with talk of stops $1.3075/80, though sell interest then seen into $1.3100, more toward $1.3130. Bids $1.3010/00.
EasyForexNews Research Team