The buying frenzy in EUR/USD has eased up allowing prices to dip back toward 1.2800. Looks like the earlier corporate demand may have finally been satiated.
One factor supportive of the greenback is the fresh slide in oil prices to trend lows below $45 despite expectations of another OPEC production cut in the next few weeks. Oil producers had been huge sellers of dollars when oil was rising and the dollar falling. Now that those trends have reversed, those flows have dried up and in some cases reversed. Case in point, as the Russia rouble falls, the Russian central bank sells EUR from its reserve basket to defend the local currency.
Look for the 1.2665 area to provide support on pullbacks near-term. small stops are clustered around the 1.2650 level, dealers report.
