Spot attempted to retrace the Friday sell-off into Europe but failed at the first hurdle as the 38.2% Fibo near 1.3220 capped. In other news, many continue to attempt to piece together the details from last week but players on both sides remain tight lipped over much of the action.
The usual "corporate go-to guys" look the happiest in the wake of the moves while the real damage was done by both the Sovereign & Hedge Fund flows. Sizable orders continue to be the source of much speculation but in reality the volatility can be consigned to history and normal service can resume. Looking ahead, the latest German ZEW and FOMC minutes are the key event risks on both sides but these are not due for release until tomorrow.
As a result option players note the expiries at 1.3200 & 1.3250 at the NY cut (15:00 GMT) as a likely weight on EUR/USD into North American trading. Liikanen & Papademos comments are set for early trading but few expect ECB rhetoric to boost the Euro going forward while Paulson lines up in Washington. US data is provided by the 15:00 GMT release of October Whole-Sale Inventories.
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