Today the FOMC begins their two-day meeting to decide the fate of US interest rates, however, no change is yet expected from Bernanke and company. As a result, the Friday week, month, quarter and half-year end is seen as a more interesting prospect for the short-term risk than the immediate risk of the Fed outlook changing.
Into European trading and EUR/USD was once again sold with Euro cross selling also adding weight. Stops below 1.3420 failed to spur fresh loses towards 1.3400 and the emergence of an Asian central bank on the bid into the lows (1.3416) forced the market to attempt a slight bounce.
Into the North American open and spot finds offers into the 1.3445/50 area to cap initial bounces but topside stops are seen above 1.3455 and again on a break of 1.3480. Looking ahead, the 12:30 GMT release of May Durable Goods data is seen as the key short-term risk to the USD.
Should the volatile index fail to match the expectations for a 1.0% fall then any Dollar bounce will look to 1.3400 support while 1.3500 option structures will be targeted in the wake of renewed US unit weakness.
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