Now that we’ve squeezed up more than 200 pips from session lows we may be in for a waiting game until the US payrolls are released tomorrow morning.
From a macro perspective, fears of an imminent slide into recession in the US have eased this week as ISM figures proved better than expected and anecdotes on retail sales and employment while Frau Merkel seems to have gotten religion on the idea that, on second though, European banks really may have to recapitalized. The ECB provided gobs of fresh liquidity to the European banking sector today which should ease fears of a deeper credit crunch, though they disappoint many observes by holding headline rates steady amid the deepest banking crisis in history.
Looks like 1.3390/1.3450 could contain the action until the NFP data early tomorrow New York time.