Option related sales kept the 1.2650 barriers protected in Asian trading. However, into early European action and the immediate response to the less hawkish FOMC overnight was to buy dips. 1.2625 limited the downside and buying from all areas of the FX walk of life was seen as the price rallied back to the Asian session peak at 1.2645.
Protective offers were soon absorbed and spot was able to break higher, triggering stops on the move through 1.2655. Standing offers were seen from 1.2665 back to 1.2675 and these have attempted to stall further Euro strength. Bids are now seen thick back from 1.2655 to 1.2645 after the upbeat Trichet comments.
Into North American trading and the Trichet speech may be historic but with the ECB's Weber, Quaden, Mersch, Stark & Liikanen still to come intraday (after 09:00 GMT, 14:00 & 16:00 GMT respectively), there could be a lot of mileage in the long EUR play today. On the US data front, the New Home Sales data set for release at 14:00 GMT will provide the Dollar with its early risk. More offers are seen into 1.2700 while stops are said to be building sub-1.2625.
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