EUR/USD opened close to the upper end of Asia's rough 1.3040-80 range, and continued to rise through the European session. The main event was Italy's bond auction and demand for euros ahead of the results was evidence of decent cover. However, EUR/USD failed again around 1.3120 (100-DMA 1.3125)with sovereign and US investment banks sellers carrying the pair back down around 40 ticks. The auction proceeded okay, largely expected as domestic players were tipped with enough demand to take all the euros offered, but at the expense of higher yields. Continued spread widening between Germany and U.S. is favouring the dollar. EUR/USD upticks will likely remain muted while this is the case.
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