EUR/USD and cable continue to make furtive downside probes (cable more than EUR/USD in New York trade) but traders are quick to cover once downside momentum stalls. Stocks remain heavily under pressure this morning despite some slightly improved US economic data today (ISM ticked up a few tenth and personal income and spending rose).
I get the sense that the market is quite long of dollars at the moment but is growing somewhat impatient at the greenback’s inability to slice through the 1.25 level. A squeeze to the topside may be needed before a sustained move to the downside plays out. Look for covering to accelerate if 1.2635/40 is broken to the topside in EUR/USD. Same play for GBP/USD above 1.4150.
