The pair opened at $1.3517 this morning after a $1.3490 to $1.3528 range in the US last night. It witnessed a slow grind higher, nudging past the US high after Japanese stocks opened but early gains were capped at $1.3535. The pair eased to $1.3525 but got a boost from unexpected remarks by PBOC Governor Zhou Xiaochuan. Zhou said at a sino-French forum that euro assets and French government bonds are important investments for China’s foreign exchange reserve management. Euro-dollar rebounded to $1.3538 initially and was then carried further up to a $1.3541 high when the ECB’s Noyer then said the euro area recovery is “modest but undeniable.” A lack of any major follow-through demand then saw the move fade out and euro-dollar slipped a few notches after that, to trade between $1.3530 and $1.3535. Euro-dollar was last at $1.3531 in the face of reported sell interest building again in the $1.3580 to $1.3600 region, while immediate support is then spied at the $1.3490/80 region of the overnight US session low. The near-term focus remains on a retest of last week’s $1.3579 highwith a close below yesterday’s low now needed to relieve this bullish view.
