Closed in NY at $1.2900 after pulling back from a session high of $1.2937 to $1.2884. Rate eased to an early low in Asia at $1.2896 before picking up fresh demand, the move up gaining some slight momentum as early predictions on the Dutch election result show a pro-Europe win. A dip to $1.2912 drew buyers that took rate on to $1.2930 where rate met stronger sell interest which capped. Rate opens into Europe around $1.2925. Initial focus in Europe will be on the SNB policy announcement at 0730GMT (floor in euro-Swiss to remain at Chf1.20 despite recent calls for a move to Chf1.22) ahead of an Italian bond auction (E6.5bln 2015, 2026 and off run 2017) results 0910GMT with the main event coming after the European close at 1630GMT with the FOMC policy announcement. An extended period of low rates into 2015 is widely expected (mid or late will be the focus) with expectations remaining high for QE3. Offers remain in place at $1.2930, with interest extending to $1.2940 with decent sized stops above. Support seen into $1.2900, the level holding a large digital option strike which rolls off at 1000ET.
EasyForexNews Research Team