EUR/USD started the week with an offered tone and spot removed stops amid the steady Asian EUR/JPY sales on the break below 1.3275. However, buying ahead of the 1.3250 level stalled further weakness as reserve managers favored the single currency into European action. On the topside offers into 1.3280 cap initial rebounds with only a break above 1.3300 taking the pressure off the downside intraday.
On the options front, the bottom leg of the 1.3250/3450 DNT's remain targeted while expiries this week see a host of various 1.32 & 1.33 strikes. Looking ahead, US New Home Sales Numbers are the early risk (985K the consensus) to the Dollar correction, due at 14:00 GMT, with any clear break below 1.3250 support finding EUR/USD stops sub-1.3245 before more official buyers emerge into 1.3230 with technical downside triggers into 1.3225.
Elsewhere, the ECB's Bini Smaghi has noted in his recent speech in Paris that "concerns over FX rates have been overdone" while more ECB speakers are noted later along with the EZ FinMin meeting.
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