After falling back beneath 1.2950, EUR/USD losses moderated as prices reached a familiar zone of support where central banks have been accumulating reserves formuch of 2007. Jittery price action in EUR/JPY helped dictate EUR/USD flows this morning after the cross initially rallied following the G7.
The Group failed to single out the JPY for scorn but Trichet went out of his way to warn the market from falling for "one-way" bets. Also influencing EUR/USD price action this morning are moves in the USD index. The index bumped up against a downtrend in place almost a year at the 0.8516 level this morning as well as the 200-day moving average at 0.8513.
It trades now at 0.8510. EUR/USD resistance lies overhead in the 1.2975/85 area near-term while bids are scattered all the way down. The 100-day moving average has climbed to 1.2917. Big bounces have been seen from that average in recent weeks. EUR/USD trades at 1.2959.
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