The euro started the US session (8:00 am ET) at 1.3075 and despite weak European data ( weaker inflation, higher unemployment) and supposedly negative end of month flows the currency never looked particularly offered.
Even as Case Shiller Index came out above expectations and Milwaukee PMI below at 9:00 am the Euro started to climb toward what was then the day's high of 1.3120. It was held there briefly but triggered stops to 1.3149 and then a much weaker Chicago PMI at 9:45 am kept the euro moving upward to 1.3166 and eventually to 1.3186, the day's high. A stronger than forecast US consumer consumer confidence had little effect, and the euro did not retrace to the 1.3150 area unitl Europe had gone home.
After taking out resistance at the 100 day moving average at 1.3160 and strong offers at 1.3170-80 the Euro retraced as new Italian PM Enrico Letta, stated would like to see Europe show the same determination on growth as it does on sound public finances. PIMCO's announcement that they were cutting Spain and Italy weightings as the bond rally was ahead of fundamentals also weighed on the euro in afternoon trading.
Dollar/Yen started the US session at 97.50 and Euro/Yen at 127.47 and initally rallied to a session high of 97.79 as a result of the stronger than anticipated CaseShiller Home Price Index. However 45 minuts later the Dollar was hit by a very weak Chicago PMI. Dollar/Yen was steadily sold down to 97.01 though the barrier at 97.00 remained in place. Strong Euro-yen buying then saw Dollar/Yen bounce sharply back to its opening session level of 97.49. Further moves were limited in the afternoon as Dolla/Yen traded 97.44-62 but spent most of the time close to 97.50.
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