EUR/USD made an early stab at the topside into European trading and 1.3560 printed. However, the topside continues to look thick and with key data awaited many preferred to hold out before re-entering the market. Yesterday we at IFR noted that 1.3565/75 was key to the medium-term upside but this large resistance zone now stretches to 1.3585 as the talk of central bank sellers into 1.3580 and the 21-Day moving average line near 1.3585 fortify the previously noted double-day high at 1.3565 (May 9 & 10th) and the 50% Fibo at 1.3573, of the sell-off from 1.3683 (April 27th) to 1.3463 (May 11th).
Bids into 1.3530/35 have propped on dips thus far and as a result the stops seen below 1.3520 have remained intact. Option traders note 1.3500, 1.3530 & 1.3550 strikes intraday and the lower of these expiries could offer support to the pair should the downside come into view ahead of the 14:00 GMT NY cut. Into NorAm trading and the US data/comment deluge begins with the Bernanke speech set for 12:10 GMT. Following this at 12:30 GMT, US April CPI (+0.5% forecast) and May NY Manf. data are released.
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