EUR/USD down at 1.3935 from early 1.3970, having been as low as 1.3917. The move lower accelerated on the news China has raised reserve requirements by 50 bps for 6 large commercial banks. This has the effect of increasing risk aversion as people worry about the impact such a move will have on Chinese growth. Given the move is temporary, in place for two months, its impact on the Chinese economy and forex is likely to be fairly limited. Bit of much needed encouragement for the dollar bulls though.
For those of a technical persuasion, trendline support for EUR/USD now kicks in down at 1.3896. Likely to be hefty stops below.
