Interest in EUR/USD is reported to be have been limited as Euro crosses and Dollar majors generate the bulk of the short-term momentum being witnessed. Stops below 1.2940 were removed as reserve managers failed to prop the dip but official buyers into the 1.2920 and 1.2900 levels are noted to stall further follow-through sales.
Looking ahead, the FOMC concludes their latest policy assessment later today (19:15 GMT) so many will refrain from entering fresh positions until after the Bernanke rubberstamp to 5.25% rates. Before this event, the deluge of US data continues with ADP Jan numbers, Q4 US GDP and employment (both 13:30 GMT), NY Jan NAPM (14:00 GMT) & Chicago PMI (14:45 GMT). Add to the mix the 15:00 GMT Paulson comments and another choppy afternoon could be on the cards.
1.29/30 directs broader interest with 1.2865 seen as the key level on the downside. On the options front, another batch of 1.30 strikes are set to mature at the NY cut (15:00 GMT) but still downside talk continues with exotic 1.2850 interest now compounded by speculation over 1.2820/30 option structures.
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