The pair closed in NY Wednesday at $1.3533 after rate had bounced between $1.3525-55 in the US session, within a slightly wider intraday range of $1.3522-57. Decent demand was encountered on approach to $1.3520 and kept rate buoyed but overall tone remains bearish while rate remains below an initial resistance at $1.3580/85, with a break of $1.3605 now seen needed to relieve current downside pressure. Trade through Asia was contained within a range of $1.3530/46, the rate trading around $1.3540 into Europe. EZ IP provides the main data interest this morning ahead of US retail sales and weekly jobless claims. Bids remain into $1.3520, with further interest seen stretching down through the post ECB rate cut low of $1.3503 and into a reported barrier at $1.3500. Stops noted below, larger ones on a break of $1.3480 ($1.3477 2014 lows; Feb3). Resistance $1.3555/60, $1.3580-85 and $1.3600/05. Traders are aware that the $1.3600 level holds the strike of a very large option expiry for today’s NY cut (E4.55bn) which could provide some attraction, or at least buoyancy, ahead of the run off. Euro-yen remains below its 200-dma (today Y138.75) and seen adding to the negative aspect of the euro.
