The EUR/USD opened in Asia around 1.3165 after moving higher on Friday due to broad USD weakness emanating from growing geo-political concerns, higher oil prices and growing concerns that US subprime mortgage lenders might be in trouble. After a quiet start in Asia this morning the EUR/USD started to grind higher and was helped along by solid buying of EUR/GBP and EUR/CHF.
The EUR/USD grinded up to 1.3199 with option related selling at every level pip along the way. There was talk of an option barrier at 1.3200, and it definitely traded that way with the EUR/USD falling back to 1.3180/85 after 1.3199 kept the stops above that level safe for the time being. There is talk of decent stops building above 1.3200 and a break above targets the Jan 3 high around 1.3290.
German GFK and inflation data will be released later today, but the main driver for EUR/USD moves is likely to be US yields, commodity prices and the US stock market. Hourly support has built up around 1.3155/60 and a break below 1.3150 is needed to relieve the upward pressure.
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