US Session: Orders and Options Watch

EUR/USD: Despite rising briefly to 1.3859 earlier in Asia, the single currency ran into heavy offers there and tumbled throughout the European session as Italian 10 year bond yields surged to fresh high, report from Fitch regarding eurozone facing tripled risk of a double dip recession since Q2 also put heavy pressure on euro. Stops below 1.3720, 1.3680 and 1.3650 were all tripped and more stops are reported below 1.3600 (with some bids from Middle East names ahead of this level), once these stops are triggered, the pair may drop further to 1.3550 and 1.3525 where option barriers are located. On the upside, offers from various parties (including UK clearer) are reported from 1.3650 up to 1.3680 and more selling interest should emerge around 1.3720-30 with stops only emerging above 1.3750 and 1.3780.

GBP/USD: The British pound tumbled in London session in tandem with euro on risk aversion, the release of much worse-than-expected UK trade balance number (record worst at -9.8 bln gbp) also put pressure on sterling, stops below 1.6000 and 1.5980 were tripped, more stops below 1.5945-50 are now in focus but some cross-related bids are tipped further out at 1.5900-10 with mixture of bids and stops seen around 1.5870-80. On the upside, offers are lined up at 1.5980-90 and also at 1.6030-40 with stops building up above 1.6070 and 1.6100.

USD/CHF: The greenback staged a strong rebound in European session on dollar's broad-based strength against European currencies and offers at 0.9000 and 0.9030 were cleared, mixture of offers and stops at 0.9060-70 is now within range, more stops are tipped above previous resistance at 0.9082 but selling interest should emerge around 0.9120-30. On the downside, bids from European names are reported at 0.9000-10, 0.8970/75 and also 0.8950 with stops building up below 0.8920 and 0.8890.

USD/JPY: The currency pair traded in relatively narrow range as focus remains on European currencies, bids from semi-official names are still noted at 77.50/55 with stops placed below there and also 77.20-30 but more buying interest should emerge around 77.00. On the upside, offers from exporters and real money accounts remain at 77.85-90 and also 78.10-20 with some stops seen above 78.30 and 78.50 but more selling interest from same parties should emerge around 78.80-90.