EUR/USD was defensive as EUR/GBP wilted in the wake of cable strength related to MPC 8-1 vote on further QE and lows were minted as the US session got underway. A modest bounce saw lift to $1.3100 around the ECB fixing before euro returned to the defensive and fresh lows were minted at $1.3058 on the ensuing dip as EUR/GBP added weight. With talk of corporate demand and sovereign range-player buys, euro rebounded off the low, lifting smartly to $1.3100 ahead of the option cut but with offers still visible, pair stalled again. A dip based at $1.3085 but with cable on a tear higher, EUR/USD romped back above $1.3100 and scrambled to $1.3137 as shorts were squeezed ahead of the London fixing. Euro deflated from there as chatter suggested option-related supply emerged, euro retreating to $1.3105 by the London close but the single currency held above $1.3100 for the balance of the session, ending around $1.3125.
EasyForexNews Research Team