Into the new week and EUR/USD eased lower in Asia after the Chinese weekend rate hike, however, it was not until early European action that the momentum increased. Stops triggered on the break below 1.3295 to fuel the descent but a "structured" official name was found on the bid into 1.3285.
This stalled the sell-off, to leave the sub-1.3280 intact, and the price bounced. However, 1.3320 sales capped the rebound to leave the downside in view. On the options front, 1.3350 barriers are key to the short-term topside but structures are also seen in place into the 2006 yearly high around 1.3370 with 1.3375 interest also touted before the next barriers at 1.3400. Looking ahead, declining risk aversion has boosted the Dollar slightly into the new week but event-risk on the horizon could keep the US unit from strengthening further.
The FOMC meeting this week should constrain the Dollar but US rates are unlikely to finish the week any different from where they opened. Intraday and the focus is on the 16:00 GMT Chicago Fed Manf. Index (January) followed by the 17:00 GMT release of the NAHB Index (March).
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