Post Thanksgiving trade has done little for the holiday mood and certainly nothing for the US Dollar. A steady Asian session with price contained within a 1.2945 to 1.2965 range and clearly signs that EUR longs were getting twitchy. Into Europe and the market took on a different personality.
Cracks appeared in the Dollar recovery following Thursday's tight, almost corrective, session and a number of factors were cited as the market tried to put a definitive handle on the Dollar rout. German import prices for October and French business climate numbers failed to inspire and were eventually lost in the mire of Dollar selling, which dominated the bulk of the European morning. Hawkish overtones to the Leibscher remarks only served to reinforce a EUR rally that was already well underway.
EUR/USD opened in London at 1.2960, rose to 1.30 and then the fireworks were lit. Option stops, carry trade unwinding and fund squaring ahead of month-end were blamed for the rally to 19-month highs of 1.3109, a 164-point bounce from the Asian lows. Resistance is now at 1.3125, April 21 highs from 2005.
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