Closed in NY at $1.2203, after recovering off session lows at $1.2166. Rate dropped back from an early high of $1.2210 to $1.2181
in opening Asian trade as market reacted to Moody’s downgrading of Italy’s bond rating. The move down reported to have met option related demand, with talk in Asia that an Asian reserve name has decent demand placed into $1.2150 underpinning. Release of Chinese GDP data, coming in better than the recent rate cut had forecasters fearing, boosted risk with strong demand for Aussie dollar initially leading EUR/USD back above $1.22 to $1.22175 only for EUR/AUD sales to counter the move and take EUR/USD back to $1.2190. Rate settled around $1.2200 for the balance of the session, trading around $1.2202 into early Europe. Asian traders report that a decent sized $1.2200 strike option is set to roll off at 1400GMT and could act to anchor through the day. As mentioned, option linked demand expected to cushion moves lower into $1.2150, while main sell interest seen placed between $1.2235/50. Any break above this latter area to expose stops above $1.2300.
EasyForexNews Research Team