Closed in NY Wednesday at $1.2973, just off posted lows at $1.2970, after rate had been sold off on general dollar strength (reaction to stronger than expected ADP data) as well as position adjustments ahead of today’s ECB rate decision/Draghi press conference. Rate extended lows to $1.2965 into early Asian dealing, as market here probed for stops below the recently posted 2013 low at $1.2966 (Mar1). However, the early dip encountered demand interest, traders noting that the larger stop interest seen placed under $1.2960, with rate recovering off lows through the balance of the session to $1.2997, trading around $1.2992 ahead of Europe. The move up in Asia was aided by S&P changing its outlook for Portugal to stable from negative, though met headwinds as Dallas Fed Fisher was reported saying that ‘things in Europe are very bad right now. Offers are seen in place to $1.3000, more toward $1.3010 with stops above. A break here to open a move toward $1.3050/60 ahead of $1.3080. Support $1.2965/60, with stops below, if triggered to meet option linked demand ahead of $1.2950, $1.2925 and $1.2900 barriers. ECB in focus today, no change expected for rates (1245GMT), though ECB Draghi expected to be dovish (1330GMT).
EasyForexNews Research Team