Into European trading and the path of least resistance in EUR/USD was again followed. 1.3202 traded in NY yesterday but talk of exotic 1.3200 interest remained and barriers into 1.3205 are now speculated to be adding weight to the topside. 1.3196 was the traded high in Asia but spot was only working lower as European players entered the fray.
Bids into the 1.3145/55 zone were targeted by short-term accounts and spot worked as low as 1.3156 before the German data forced a bounce. The ZEW headline came in at 5.8 (against the expectations for 3.3) to force the rebound but smaller offers into the 1.3180 mark have capped the return towards the 1.32's thus far.
Looking ahead, official bidding and the stops down at 1.3145 are seen as the key intraday downside trigger but should this area of support stay intact then a retest of 1.3200 is expected with any eventual break higher eyeing a return towards the 1.3260 level then the 2007 high at 1.3296. US February retail sales data will be key to the North American direction, with economists look for a +0.3% reading.
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