The euro chopped around in a 60-pip range on Monday but finished the day unchanged. The market is looking forward to details about how the ECB will define bad loans, which are expected tomorrow.
During the height of the crisis in the US, the bank stress tests were seen as a watershed event, or at least a helpful vote of confidence in the banking sector. The trick for the ECB will be striking the right balance and the impairment criteria will be a good measuring stick.
Bids start at the US low of 1.3862 but strong demand is cited at 1.3850/55 with smaller bids at 1.3835/30 with more at 1.3750/60. The offers begin at at 1.3900 (session high was 1.3898) and extend to 1.3915 with reports of heavy Asian selling at those levels. Possible offers at 1.3825 with stops above. Strong offers at 1..3950 and a barrier at 1.4000.
