Spot printed 1.2556 before encountering Asian central bank demand and option protection ahead of the 1.2550 option barriers. As a result, ahead of the North American open the price is struggling to eke out further Dollar gains and European names are now suggesting that selling into a corrective rebound could offer a better risk reward. Bounces to 1.2580 and 1.2600 will be looked for into the open and signs of an increase in fresh sales will be needed if the downside, and therefore the option barriers, is too stay in focus. Below 1.2550 stops are noted that if triggered London dealers suggest will speed the price onto a test of 1.2500 if not 1.2450 in the medium-term.
Technically, both UK Clearer and Swiss name research notes have this morning claimed that any break below 1.2570 calls to a retracement to the 1.2450/55 level.
Elsewhere the hawkish comments from the ECB's Garganas should help underpin the Euro. In his speech at the interim Bank of Greece"s Monetary Report he noted that "if the ECB assumptions are confirmed, further withdrawal of accommodation will be warranted" and that rates "remain low despite recent increases".
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