ECB’s Nowotny comments that there was little prospect of a rate cut, and although the ECB didn’t like a strong euro, they must live with it, helped euro up to a US high of $1.3813. But failure to overcome recent highs of $1.3818 and $1.3832 then saw euro slip back before it then started in Asia at $1.3745. But morning trades were lackluster and interest in the pair was generally muted ahead of the FOMC decision today. Euro-dollar carved out an early $1.3733 to $1.3750 range and there it stayed through themorning. It slipped to the morning low as euro-yen also retreated following the lower open in Japanese stock markets. For the rest of the morning, euro-dollar saw its trading range tighten even further to between $1.3733 and $1.3744. Ahead, last night’s close below the $1.3764 Oct 24 low combined with overbought daily tech studies has relieved the previous bullish focus and risks a deeper correction that tests the key $1.3651 Oct 21 low with the 21-DMA just below at $1.3637. Sellers remain ahead of the $1.3820-32 region with a close above needed to refocus higher and kick start bullish momentum. Any break below today’s low ($1.3735 last night) is seen likely to run into rumored demand from $1.3720.
