Closed in NY Monday at $1.2955 after recovering off a late NY session pullback of $1.2924 as the market reacted positively to a Eurogroup plan to take small bank depositors (less than E100,000) in Cyprus out of the bail-in payment requirement, though still expects the country to come up with E5.8bln for the planned levy. Rate edged to an early high of $1.2964 before turning lower, touching a base at $1.2936 before settling between $1.2950/65 through the middle part of the Asian session before edging up to $1.2970 ahead of the European open. Rate remains open to headline risk, with speculation over the result of today’s proposed Cyprus parliament vote (1600GMT) for the Troika measures. As a case in point, rate has just dropped back from that high to $1.2935 as it reacts to Cyprus government spokesman commenting that he doubts the levy measures will be approved. Offers remain into $1.2970, stronger at $1.2995/1.3000, with stops seen from $1.3010. Support $1.2935-20, stronger toward $1.2900 (61.8% $1.2882-1.2996). Apart from Cyprus headline risk Germany ZEW due for release at 1000GMT. Traders still seem to favour selling into rallies toward the $1.2970/00 area.
EasyForexNews Research Team