EUR/USD retains an offered tone as European trading winds down but dips continue to find buyers in the 1.3140/50 area. A supra-national central bank has been spotted buying several times this morning. Stops continue to build below the 1.3130 level with the market hanging onto long positions, buy and large.
The short-covering portion of the rally appears to be over and the building of long positions remains intense. A shakeout may be necessary before fresh highs can be made. Dealers are closely eying Cable for clues as it has the closest major topside hurdle to conquer, the 1.9550 level.
It has come very close but so far is failing. Deeper profit-taking in GBP/USD is likely to drag EUR/USD lower as well. 1.3090/1.3100 is first support, followed by the 1.3060 area.
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