1.3100 may have printed into the Euro Zone HICP data but the release of the +1.9% Y/Y Euro Zone inflation looks to have offered the Euro some semblance of support. As a result, EUR/USD has steadied around the 1.3110 area in the wake of the HICP data but trading remains offered on any sign of rebounds.
A break below 1.31 may be seen intraday but the attention has now turned to the 1.3085/90 level and some players (including one German) see the pair as forming a base around here into the US Employment release tomorrow. Any pre-data break below here will see 1.3050 eyed with an employment confirmation of the USD strength then seeing 1.2925/75 then eyed on further volatility.
Should the Dollar be dented by a weaker non-farm release then spot would be prone to bounce. Adding to the support into the 1.3100 area are the option related bids linked to the large expiry seen at the price at the NY cut at 15:00 GMT.
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