Into European action and EUR/USD was dropped back to 1.3300/05 bids on the back of the downward German Retail Sales revisions. However, bids into the figure helped prop spot and the pair soon recovered to re-test the Asian session high at 1.3320/25. 1.3275/80 is still seen as the key intraday bear trigger with C/B buyers tipped here while more bids sit at 1.3250.
Looking ahead, dealers have cited the impending FOMC rate verdict as having constricted the risk appetite from the markets in recent days. Into North American trading and there is little else to shape the event-risk profile with the calendar devoid of entries with the exception of further Paulson comments. Only the most ardent look for a move, in either direction, from Bernanke with rates expected to remain on hold at 5.25% at 18:15 GMT.
As a result, it will be the tone of official rhetoric that decides the direction for the Dollar in the short and long-term. Should the USD be sold then the attention will return to the 1.3350 option barriers and the 2006 yearly high at 1.3371 before more option barriers into the 1.3400 mark.
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