[محمد السويد]

[20:06 GMT February 25] EUR/USD gave ground heavily during the US session on a
Market News International story which quoted ECB sources as saying a rate cut
will be discussed at the upcoming rate setting meeting March 4. EUR/USD, already
under pressure during the US session, dropped from 1.2605/10 to a low of 1.2475
on the news, and nearly 2.5 cents on the day. Schroeder earlier in the day
called for the ECB to lower rates. MNI suggests that a cut could be part of deal
requiring structural labor mkt and financial service reform from the Eurogroup.
Some see the ECB going a full 50 bps in an attempt to send the clearest possible
signal to the market on their seriousness in reversing EUR/USD strength.
It"s been a brutal month for the mkt, and today was just the latest of a
series of nasty reversals and near-reversals for the EUR. Dealers are now
looking to sell bounces in EUR/USD after many were either caught long or were
unwilling to sell weakness given the recent volatility. 1.2520 is the most
obvious level near-term, but offers are seen on rallies now toward 1.2550 and
1.2600 as well. An eventual retest of the 1.2450 and 1.2335 recent lows is seen.
--jc/rd