EUR/USD is rebounding after surviving another retreat toward the 1.3565 region. Stops were triggered above the 1.3630 level as intraday shorts headed ofr the sidelines despite the continued soft US equity market.
Sentiment toward the dollar remains poor in the wake of the FT opinion piece overnight questioning the durablity of the US’s AA rating. Reports that Obama is considering limiting pay on non-TARP banks executives along with ballooning deficits and rising taxes are making the US a less attractive destination for capital.
1.3660/70 is next resistance for the market. 1.3660 is the 61.8% retracement of today’s 1.3720/1.3566 range while 1.3670 was a stall point early in US trade.
