ForexLive European morning wrap – German IFO data fails to prevent euro weakness

German IFO data better than expected at 107.4 Cable attracts sellers again after sharp spike EU Commission Winter Forecast sends euro lower ECB LTRO repayment adds fuel to the euro selling Large option expiries at 10 am ny cut drive market for last part of session Another interesting and lively session in European trading so far as once again the euro finds itself the centre of attention. Traders had been factoring in a better than expected number for the influential German IFO business climate index and euro pairs had seen some good buying interest prior. This data was indeed above expectations  at 107.4 compared to 105 forecast and 104.2 previousy. Cue eur/usd up quickly 20 tics to session highs of 1.3246 but sell orders at 1.3250 put a cap on the move and the euro longs started to make for the exits. In the meantime we'd seen some good gbp/usd selling interest in early trading following a late asian spike to 1.5330 and a failure to hold above 1.5300 on a second attempt. Market seems happy to be short on this rally but large stop-loss buying anticipated on a 1.5330 break out. All was relative calm though until the EU Commission winter forecasts cast a gloomy picture on the EMU area with sharp downward revisions of gdp and concerns over budget deficits. Not much different to recent ECB forecasts but enough to unsettle the markets and we had another dip lower below 1.3200 on eur/usd with other eur pairs following suit. Once again the buyers appeared, with the 1.3200 option expiry later in new york at 10am being somewhat of a magnet. Cue a rally to 1.3220  then the next sharp move lower as the ECB revealed that the latest LTRO repayments fell well below market expectations at eur 61 billion compared to eur 125 billion anticipated. Eur/usd dropped like a stone to 1.3173 then once again to 1.3156 but talk of a large asian sovereign buying good amounts down there, and with the 1.3150 option expiry today also in play we've sat right in the middle of the 1.3150-1.3200 targetted areas ever since. Nothing in the way of data to come of note but it's Friday, and it's fickle as fickle can be out there right now.