Into European trading and the option related supply from 1.3040 back to 1.3050, linked to expiries, left the topside looking limited. As a result of this and the broader Dollar rally, linked to G7 Yen & Yuan speculation, the pair worked lower.
Bids into the 1.3000 area were always expected to prop and with the eastern European (that sold yesterday) then found on the bid the price looked to stabilize. Add the mix another quality player on the bid and the price attempted to rebound. Offers around 1.3015 kept the pressure on the downside and speculative sales increased as cable was impacted by poor UK data. Spot moved lower once more, ECB rhetoric also weighed, and the price edged below 1.30.
Asian C/B bids into 1.2990 then emerged to prop but European-led sales cap as the sub-1.2980 stops are eyed.Looking ahead, a push below 1.2980 will put the pair on course for a run at 1.2950 but the Euro remains supported by cross flows and the continual support of reserve managers. As a result stall near the lows is expected with a rebound likely after the topside expiries have rolled-off.
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