Into Thursday and the Euro still looks a prime candidate for a rally and EUR/USD has been coiled tighter than a cobra after two consecutive days of consolidation and failures in both directions. 1.3259 capped on the 27th but equally the downside looks limited as option expiries at 1.3200 help prop.
Intraday another downside strike is set to mature at the NY cut (15:00 GMT). A retest of the 2007 high at 1.3296 remains a viable bull target but 1.3040/50 must first be overcome but US data will be key if a rally towards the 1.3300 option barriers is to be seen. Central bank offers and gamma-related protection kick in around 1.3275 should the Dollar trade softer in the wake of the 13:30 GMT Income and Personal spending data or the 15:00 GMT February ISM release.
On the downside, only a break below 1.3180 adds momentum with a break of the 10-Day M/A line at 1.3175 putting potential on the charts for a retracement to 1.3150 and 1.3080. Elsewhere, more Paulson comments are expected after the European close but China will no doubt dominate once more.
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