EUR/USD traded on a supportive footing in to the European session amid reports of good buying interest from Asia and the Middle East. A move from 1.4150 up to 1.4223 was noted in thin trade and interest was mooted via EUR/JPY from speculative names that were heavy buyers from 136.00 to 136.81. Some of the EUR/USD interest was pinned on option maturities at 1.4200 and could influence ahead of the ECB. The market consensus is for a steady hand, but the details of its covered bond purchase scheme will be carefully scrutinized. Overall, today’s meeting is not expected to significantly impact the broader trend, with the market trading off growth prospects and the churn in risk. The dollar’s long term reserve status and near-term direction is a more pressing concern. Overstretched positioning and dollar supportive comments on Wednesday triggered a corrective move in to 1.4100, but reserve manager bids between 1.4130 and 1.4100 protected massive stop losses sub 1.4100, leaving a range bound theme. We expect more of the same today, but with downside risk after the daily charts turned bearish yesterday
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