Most of the fireworks took place early-on in the US session and in the last hour or two things have settled into a more leisurely summer-Monday pace. Traders are trying to sort though the various bits of dollar-supportive pre-G8 rhetoric from over the weekend, suggesting that any move away from the dollar as reserve currency will take place over years rather than any time soon, the hang-over from Thursday’s weak US employment report and this mornings somewhat upbeat service-sector ISM report.
EUR/USD probed far enough to trigger some stops below recent range lows in the 13985 area but failed to follow-through. Ditto for EUR/JPY and USD/JPY. GBP/USD had a more dramatic downside thrust after breaking the 1.6200 area, falling all the way to 1.6093 before rebounding smartly, now at 1.6231, squeezing fresh shorts along the way.
EUR/CHF remains a near-term focus, tenuously hanging onto the 1.5150 level below which stop-loss sell orders are rumored. It trades at 1.5163.
