EUR/USD: Shifts into Lower Gear

EUR/USD has shifted into a lower gear as short-term speculators continue to pair back longs taken last week. Much ink has been spilled today over the hawkish nature of the Fed and this has dealers looking to trim EUR/USD longs. Overnight news that the German BDI sees an export slowdown next year, while the big German VAT hike is expected to crimp domestic demand, is hurting the EUR as well. Small bids are seen layered down to the 1.2500 level and a 1.2550 expiry is expected to keep dips limited near-term. With the market oversold on an intraday basis, the big moves for the day look to be behind us, in all likelihood. Offers are eyed at 1.2575 near-term with more toward 1.2600.