EUR/USD erased the 1.3625 option barriers in Asia before fresh Russian buying spurred further gains into early European action. 1.3638 was hit but spot failed to hold the highs as jaw-boning and protection of topside options structures weighed. Bids into the 1.3600/05 area then propped. Should spot break below 1.3600 then a small pre-weekend clearance of weaker longs could be seen.
Sell-stops are located sub-1.3600, however, with decent buyers then noted into 1.3585 and better sized stops noted below 1.3580 it will take a break below this latter level before the markets begin to talk of a more significant correction. On the topside, option barriers into 1.3650 will remain protected but some London dealers suggest that a rally towards 1.3660 could unfold ahead of the weekend.
Coincidentally, central bank sellers are tipped to sit at 1.3660 with the all-time high in EUR/USD then eyed at 1.3666. Elsewhere, official rhetoric on the "high level of the Euro" has increased but it is yet to hold the panicked tones witnessed amid the last test of these levels, in late 2004 when 1.3666 printed.
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