Asian trading saw the 1.3400 option barriers erased, with 1.3412 seen as the high. However, the spot failure to hold the break into the 1.34's left the downside open into European trading. Early US selling of EUR/JPY depressed spot before interbank and speculative supply emerged.
Yet buying into the low 1.3360's from US investment and French names staved off further weakness. Sales in EUR/GBP in the wake of the recent UK data then weighed before middle-eastern sellers were noted. Ahead of the Euro Zone data and spot finally managed to break below 1.3360 support but the dip was short-lived as the combination of gamma related demand, linked to the 1.3350 expiries, and fresh buyers, linked to the EZ numbers, emerged to force a rebound.
Offers are still seen into 1.3380 that look to cap rebounds while barriers are speculated upon into 1.3425 but confirmed into 1.3450 and 1.3500. Looking ahead, Bernanke comments are set to kick-off the North American session (13:20 GMT) followed by some more ECB Liikanen comments (due around 13:30 GMT) before the 14:00 GMT unveiling of US Leading Indicators.
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