EUR/USD, unable to take out resistance in the low 1.3860s, is seeing some more profit-taking as frustrated longs square at least a portion of their positions for fear that we pullback more deeply.
1.3780 is the key level near-term though bids are seen down to 1.3770. Stops are seen beginning at 1.3675 with more at 1.3765.
No surprises from the Fed’s Bernanke, upbeat US ISM data and the potential for the ECB to fail to live up to the market’s hawkish expectations are all factors gnawing at the confidence of the EUR longs.
That, and the fact that a US bank bought GBP 800 million between 14:30 and 15:30 GMT and could not sustain its gains are fear factors. On the plus side for the euro, options related buying is said to be significant in the 1.3770/80 region…
