Euro had lurched under $1.3100 as rumor of a French ratings downgrade provided fuel to flush stop-loss sell orders under $1.3100 but slide was arrested by option-related demand that emerged around $1.3070 and as market dismissed the rumor, euro recovering easily to $1.3100 on short-covering. A brief pause around $1.3100 resolved with a euro spike higher amid talk of US custodial buys of EUR/AUD in large size, euro spiking to $1.3140 before a pause and then stretching to $1.3150 as further weak shorts were squeezed. Euro stalled from there and reversed, talk of option-related selling later explaining the cap and the subsequent slide to $1.3120 seen around the European close. From there, euro chopped inside $1.3120/40 in light afternoon dealings, ending around $1.3130.
EasyForexNews Research Team