[محمد السويد]

[19:46 GMT February 20] EUR/USD wilted during the US session. A number of
factors conspired to jolt the market out of its complacency regarding long EUR
positions. First was an unexpected rise in US CPI. While too early to accelerate
a Fed hike, it puts the market on guard for further whiffs of inflation. The
delayed PPI data due next week grows in importance as a result. Also helping
propel the EUR lower was the report that Japan had upped its terror alert to its
highest level, sparking renewed short-covering in USD/JPY. Finally, remarks from
Austrian central banker Liebscher holding out the omnipresent threat of
intervention helped push EUR/USD over the edge. Heavy long liquidation ensued
once EUR/USD broke below 1.2620 this morning, taking the pair to 1.2495. Options
players scrambled to sell owing to short gamma positions while rumors of margin
calls made the rounds as spec positions were indiscriminately covered. A move to
1.2335/55 is now eyed, fully retracing the rally to 1.2925. 1.2580 and 1.2620/25
are important resistance levels now on rallies. --Jamie.Coleman@thomson.com/rd
.



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