Can Euro Maintain Recent Highs?

The late New York run up in the EUR/USD did not survive the Asia session as traders looked to sell the unit at more attractive levels. Although reaching 1.3370 in early morning trade, the EUR/USD descended from these highs amidst the backdrop of fleeting optimism in the handling of the Euro Zone crisis. Although markets reacted positively to news that the European Union would help sure up any deficient banks in the region, soon after, Italian debt was once again downgraded. As the day moved on, Japanese Finance Minister Azumi denied earlier reports that Japan will be purchasing EFSF bonds, thus dampening risk further. The EUR/USD soon found itself at lows of 1.3260 and remained just under the 1.3300 big figure for the better part of the remainder of the day. The Euro found some support in the EUR/CHF pair as rumors persisted that the SNB would move the current peg from 1.2000 to 1.3000. EUR/CHF was just off of session highs of 1.2270 as of this writing.

Despite the above circumstances, the session was a very calm one as traders look to top level data on the horizon in both ECB and BOE rate decisions tomorrow as well as employment data out of the US at weeks end. China out on a holiday has also seemed to put the kibosh on liquidity here in Asia.

Looking further down under, the AUD/USD basked in an almost two big gain early in the day, but the 0.9590 apex of that move was not sustainable. Although retail sales data impressed at 0.6% versus a 0.3% expected, the Aussie unit soon touched a 0.9485 bottom before regaining levels closer to 0.9530. The NZD/USD remained just under daily highs of 0.7630 at session’s end.

Ahead in London, expect UK current account and services PMI to be the big hitters of the session followed by Euro Zone retail sales. The US follows that up with some important data in ADP non-farm payrolls as well as ISM non-manufacturing PMI data.

Source: Forex.com

05.10.2011