The pair had a rocky start to the Asia-Pacific session this morning thanks to news that the ECB would stop accepting Greek government bonds as collateral. Traders at first didn’t know what to make of the news nudging the euro higher initially but then doing a rethink. Euro-dollar moved from about $1.1420 pre-headlines to $1.4447 on the first headline and subsequently posted a new day’s low near $1.1387. It then continued to slip as the market took the announcement as a clear negative, eventually hitting a low of $1.1304. From there, rumored demand, some of the option-related, from $1.1300 and below, managed to hold the downside and euro-dollar recovered. Talk of euro-yen demand from Japanese accounts and system bids also powered the recovery, with euro-dollar rising through the $1.1345 opening levels and then extending the gains to a high of $1.1359. Euro-dollar was last at $1.1355 with support seen at $1.1264, marking the 61.8% Fibonacci retracement of the $1.1098 to $1.1533 rise with noted expiries also just beyond the highs in the $1.1350/60 region.
