Time to put our thinking caps back on today as correlation between equity prices and the euro has completely broken down today.
EUR/USD is slumping to fresh session lows in the mid-1.2230s after upbeat US housing data and stocks are maintaining solid gains after yesterday’s sharp topside reversal.
Could the market be paying attention to US domestic factors for a change? Looks like it.
Spanish banking jitters remain a drag on the euro as does selling of reserves by Asian central banks and perhaps the SNB as well.
The 1.2180 area is next notable support for EUR/USD. 1.2260/70 is now resistance.
