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Pullback Considered Corrective


Holding Above Recent Lows


BLOCK, Large 3Y Midcurve Put Condor

MNI (London)

It was noticed in earlier trade that the EUR was proving to be a laggard, in comparison to sterling, in taking full advantage of USD weakness through Asia and into Europe. However, EUR/USD did manage to edge to $1.1883 in Europe, off its Thursday low of $1.1802, but release of disappointing France flash PMI data provided the initial EZ growth concerns. EZ PMI reinforced the concern and acted to press rate down to challenge Thursday's low of $1.1802, making a brief show to $1.1799. Recovery effort proved shallow, failed to edge back above $1.1820 before rate turned lower again into NY. Release of strong US PMI data, and then US Home Sales, prompted further USD demand, possibly fuelling end of week profit taking, and pressed rate to $1.1754. Rate picked up demand into the dip, settling around $1.1780 through the 1600BST fix, and continues to hold in post fix trade. Support remains between $1.1760/50, a break to expose recent lows at $1.1711 and $1.1696. Resistance $1.1800/05, $1.1850 and $1.1880/85.

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