Early flows in [EUR/USD] have seen Euro area cb's quick to take advantage of the much higher levels on offer, and traders also expect corporate to see value in Euro sales initially. However, the upwards trajectory of the headline looks assured in the wake of a dovish FOMC, (majority saw end of the tightening process likely to be near). The initial target now rests at 1.2400, said to hold another option barrier, and attracting talk of Asian offers ahead. Much of the flows in Asia have arisen out of Eur/Yen trades with Japanese investors and exporters heavy sellers against a largely speculative led rally. The 145.00 barrier remains key with a break still favoured, and if seen a possible signal for a more sustained push up in Eur/Usd. Note though that there is talk of more barriers at 145.10 and 145.50. Robust forecasts for EU Feb IP, or expectations of tame US core CPI, are also touted as merits for longs.
Don
