EUR/USD opened in Asia at 1.3185 as lower US yields weighed on USD sentiment and allowed EUR/USD to recover from the 1.3150 level. There was talk that the 1.3200 option barrier had expired and the market pushed EUR/USD up to 1.3205 to trigger a few stops.
EUR/JPY selling out of Tokyo helped to cap EUR/USD at 1.3205 and the pairing drifted down to 1.3173 as the cross fell from 159.25 to 158.60. Also helping to cap EUR/USD just above 1.3200 was talk that the same sovereign name that bought EUR/USD around 1.3150 was selling around 1.3200. Into Europe and a calm start lulled the market into a very slight EUR/USD bear drift.
Talk that Russia was a good buyer of EUR/USD set off a slight short cover rally and then a scramble to get back on the bull side caught the market wrong footed as news of a Taliban attack on a US base in Afghanistan, at the time visited by Dick Cheney, hit the screens. EUR/USD raced to 1.3230, tripping stops on route. The Cheney attack plus the Iran-US rift clearly unsettled the Dollar and helped put the European Ccy"s on a better footing.
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