Into European trading and with the Dollar on the back foot, ahead of its key inflation data, the Euro attempted to rally. Spot printed 1.2560 and traded at this high in several directions before fresh supply emerged from a prime US investment name. Interbank selling and jitters over further solid offers above 1.2565 forced spot to ease. Bids into 1.2540 were being tested as EUR/GBP sales weighed but the poor EZ data and dovish German institute comments helped the price drop back to 1.2533. Bids are seen into 1.2530 and once the full DIHK statement was digested the pair began to stabilize back in the 1.2540's. Also there is speculation on a further 1.2550 expiry.
Looking ahead, US CPI and the impact of previous US rate increases will hold the focus of the early North American session. Also set for unveiling at 12:30 GMT is September Housing Start data. With the housing slowdown also being given critical importance another significant fall will dent the Dollar and keep the focus in EUR/USD on the renewed 1.2600 option barriers. Central bank supply and stops are seen above 1.2570/80.
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