The pair started at $1.3487 this morning and then edged up toward $1.3500 in early trade as the dollar weakened following Yellen’s comments. The pair just managed to break through the overnight high of $1.3495 to reach $1.3498 before offers at $1.3400, believed to be mostly option-related, capped the move. Euro-dollar then turned back but witnessed a few more attempts at taking out $1.3500 before giving up. Euro-dollar retreated back through the earlier $1.3480 low and then sank to a $1.3464 low as the dollar recovery continued through the morning. Euro-dollar was last at $1.3471, held up by rumored demand from $1.3456/50. Further up, stops are seen if $1.3500/10 breaks,with the immediate resistance then seen at $1.3529 the high traded before the ECB rate cut on Nov. 7. This would then see the pair on track for a test of the $1.3548 Nov 6 high. Looking ahead, in the eurozone, the market awaits flash Q3 GDP readings from the EMU overall, as well as France, Germany and Italy. The median estimate in a MNIsurvey of economists looks for flash EMU GDP to come in at +0.1% on the quarter and -0.3% on the year.
