[EUR, USD]
EUR-USD, and the euro more generally, are firmer today. A drop in U.S. Treasury yields has weighed on the dollar, with the 10-year T-note yield spread over Bunds now at 121.9 bp, down from near 125.0 bp levels that were seen yesterday. A combination of short covering and corporate demand have driven the likes of EUR-AUD, EUR-JPY and EUR-NZD higher. EUR-AUD, for example, having been heavily sold this week to seven-month lows, has recouped about half of yesterday's losses. EUR-JPY made a two-day peak of 138.55 before settling around 138.35, still up over 70 pips on yesterday's four-month low. EUR-USD clocked a rebound high of 1.3565 so far, still fairly modest, with option related selling going through. Large 1.350 option strikes are reported. We peg yesterday's 1.3557 high as a key near-term resistance and risk level. A breach above this level would suggest nearer-term selling interest may have become exhausted, and suggest scope for a short-covering pop to 1.3600 and above.