Dealers note talk of buying in EUR/USD by a European central bank. The single currency has rallied nearly a cent over the last hour, from the 1.2760s to 1.2857 before stalling. Why a European central bank would buy EUR/USD except for commercial reasons is that they are covering shorts like everyone else. Most European officials should welcome a cheaper EUR as it helps the export market, to the extent that there IS an export market against the present gloomy global backdrop.
With solid bids now in the 1.2760s, EUR/USD could bounce to 1.2960 from a technical perspective. That might be tough with stocks still under intense pressure.
