Buyers are seen at the 1.2420 level and again toward 1.2380.
Volume has fallen back after yesterday’s surge, disappointing news for the bulls who would like to hold the bears’ feet to the fire.
Keep an eye on price action late in London trade today. If we see strength, I would take it as a sign that medium-term macro players are throwing in the towel on EUR shorts.
Very strong offers are seen from the 1.2480 level on up to 1.2500, the exotic option target du jour.
FOMC minutes this afternoon will be another focus as the market tries to discern whether Bernanke has his finger on the trigger or whether the safety is still engaged on his peashooter. The closer the Fed is seen to action, the more likely EUR/USD is to rally.
