EUR/USD is somewhat on the defensive at the moment, trading in the high 1.3350s after an earlier rally stalled in the low 1.3370s. The market is universally bullish EUR/USD today in the wake of the neutral shift by the Fed on prospects for narrower interest rate differentials.
Central banks were rumored buying EUR/USD on dips to 1.3350 earlier in the day as well as selling USD/CHF on rallies toward 1.2140. Looks like the market may be having a case of indigestion, keeping it from rallying to aggressively today. Offers are seen in fair size beginning at 1.3380, dealers report.
From a macro perspective, EUR longs fear that central banks which loaded up the boat below the 1.3100 level earlier this month may turn seller if prices approach the 1.3450/1.3500 area in the days ahead. EUR/USD trades at 1.3356.
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