EUR/USD managed to overcome yet another hurdle at the 1.3785 level and traded up as high 1.3796 thus far. Dealers have noted a late flurry from customers in the last half hour, one of the busier periods we’ve seen this week.
AUD/USD has been in demand from corporates and investors but Asian offers at 0.6760 are rumored, traders say.
USD/JPY bounced to the 90.20 level where offers came into the market in good amounts. Risk aversion seems to be receding further today as equities rebound.
1.3882 is the next key level for EUR/USD, the September 11 low just before Lehman went bust, and before the euro rebounded to 1.4866. Fibo resistance comes in just above that level at 1.3887.
The rally noted above to 1.4866 was predicated on fears of massive US spending. We’ve since been to 1.2330. I sense we will see a similar reaction to the notion of Fed quantitative ease: knee-jerk dollar selling like we are experiencing now followed by strength early in the new year. Just a hunch.
