EUR/USD pulled back from Asian highs of 1.3066 amid good selling from an Asian central bank, which caught intra-day accounts long in front of 1.3020-25. Light stops were triggered below 1.3000, which encouraged fresh buying interest on dips. EUR/USD's inability to sustain a move higher has been a source of frustration this week, leaving many to trade EUR/GBP as an alternative, with contrasting monetary policy strategies between the ECB and the BoE making this a safer long term bet. The influence of option expiries is hampering EUR/USD, with good outstanding interest between 1.2950 and 1.3100 over the next couple of sessions. Today sees 1.3000, 1.3050 and 1.3100 interest, which should result in continued price chop. Elsewhere, Trichet said that the ECB has already taken many unconventional measures, but is studying whether there is room for additional measures. The ECB has not decided on whether current interest rates are the lowest possible and stressed the importance of maintaining a balance. Trichet ended by saying that the euro is a strong asset in crisis.
