EUR/USD has rebounded above the 1.3900 level and now sets its sights at 1.3930, the 38.2% retracement of the decline from 1.4050 where we topped out late last week. Dealers note talk of Asian central bank activity on both sides of the market, selling earlier in the day above 1.4000 and buying sips into the 1.3850/60s. Looks like the explosive phase of the EUR/USD rally is over and a more balanced maret is with us for the time being.
On the calendar, Case-Shiller will be the early focus. A slower rate of decline in home prices is expected. EUR/US trades now at 1.3908.
