The EUR/USD opened in Asia around 1.2840 after central bank selling around 1.2900 capped the rise on Friday. After trading at 1.2838 the EUR/USD started to glide higher in Asia on the back of USD/CHF selling in the wake of very hawkish comments made by the SNB's Roth in a Swiss Sunday newspaper.
This was followed by heavy selling of the USD/JPY by a US investment bank, which further undermined USD sentiment and took the EUR/USD to a high of 1.2877. The EUR/USD settled between 1.2865/75 for the balance of the session while retaining a bid tone. Sentiment towards the EUR/USD has turned bullish with many in the market looking for a test of 1.3000 this week.
Whether or not the EUR/USD has the legs to make new highs for the year and break through central bank and option related selling will greatly depend on the large amount of important US data out this week. US PPI and Retail Sales is out tomorrow with CPI and Philly Fed index out on Thursday. Hourly support has built up at 1.2820 and a break below that level will relieve the upward pressure.
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