Into European trading and EUR/USD pulled back from the 1.3550/55 level after an Asian central bank emerged on the offer to cap the topside. However, bids into 1.3525 propped the dip and with EZ March IP slightly better than expected the Euro was underpinned. Any break above 1.3550/55 will see stops trigger before more offers are encountered into 1.3565 (the dble-day high May 9&10th).
This combined with the 50% Fibo, of 1.3683 (April 27th) to 1.3463 (May 11th), at 1.3573 forms a 1.3565/75 resistance zone. Therefore, a break above 1.3575 would be a more significant topside break and indicative that a return to the 1.3683 all-time highs could be looked for. Option traders note the expiry today of more 1.3500 and 1.3600 strikes.
Both are set to mature at the NY cut at 14:00 GMT along with large 1.3700's. Looking ahead, there is a lack of US data on the calendar intraday and as a result the attention will turn to the post-European close Fed speakers. At 20:00 GMT Fisher speaks on "The Growing Importance of the Service Sector" followed by Lockhart comments at 22:30 GMT.
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