Looks like its gonna be another one of those days…The economic backdrop favors continued risk aversion which has us maintaining a sell-the-rallies view in EUR/USD. On the other hand, fear of central bank intervention is prompting a bit of two-way trade, which is probably a good thing. Overnight, Japanese finance minister Nakagawa said rapid moves in in forex are undesirable for the economy and that they should be avoided at all costs. The market took notice and set about covering EUR/JPY shorts. Further RBA intervention in Aussie has the market concerned that they may soon be joined by their Japanese counterparts, as well.
1.2390 overnight lows in EUR/USD are now support ahead of trend lows at 1.2330. Set stops above 1.2650 on shorts.
