Into European trading and the disappointment from the German retail numbers saw spot sold. However, sovereign buyers and corporate support for EUR/USD helped offset any knee-jerk drop. Selling into strength prevailed and trading saw the offered tone continue to dominate with offers into 1.3180/85 capping.
Bids into the 1.3150 level were targeted by bears and speculative sales increased amid the move lower. Option related buying did little but stall the move lower and into the Euro Zone data release and the sub-1.3150 stops were removed. 1.3146 printed as PPI matched expectations and the pair rallied slightly. However, sellers still remain and the sub-1.3145 stops remain threatened with talk now turning to official bids into 1.3130/35.
Looking ahead and dealers saw the Poole comments as the only real potential saviour for the Dollar ahead of the weekend. Michigan data is not expected to be US unit supportive so the focus has turned to the St Louis President to boost the buck by erring on the side of growth and continued recovery.
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