Into the new week and the 1.3350 option barriers failed to last the Asian session but after the stops above had been triggered the pair was unable to sustain the higher levels. As a result, profit-taking drove the late Asian session and EUR/USD drifted lower ahead of the European entrance.
However, into Europe and short-term accounts have added weight to the downside and accentuated the move lower as they forced spot to pop below the sub-1.33 stops. The price is attempting to steady having removed these tight downside stops and London dealers talk of only a break below the 1.3280 level as "taking the pressure off the topside". Below here a full retracement back to 1.3220 will be looked for. Looking ahead, the 10:00 GMT release of Euro Zone PPI is seen as the immanent event-risk.
Economists expect the October release to come in at +0.2% M/M & +4.1% Y/Y. On the options front, one-touch large 1.34's are noted while smaller 1.3375 structures are rumoured, intraday and expiries are noted at 1.3100 & 1.3175 in decent sizes at the NY cut 14:00 GMT.
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