Forex Market Update: Euro Pares Losses Following the Drop in German PPI

EUR/USD traded up to 1.3640 after aggressive Middle Eastern buying interest. Weak trailing stops were filled on the way up and more are noted at 1.3655 and 1.3670 ahead of good standing offers at 1.3700. Larger stop loss interest is noted at 1.3740-45, which is expected to see heavy interest if it come in to play, although this is likely to be dependent on risk appetite. The euro has shaken off the decline in German PPI, which was much weaker than expected at -1.4% m/m and -2.7% y/y. The focus is likely to remain on equity markets, which are little changed on the session as the market digest economic recovery prospects. Option players indicate large outstanding expiries at 1.3600, which could draw an influence if the topside holds.