This demand has diminished overnight following a possible break-through in negotiations over Syria. At first glance, Russia’s willingness to step in to help broker a non-military resolution to the disposal of Syrian chemical weapons might have raised a few eyebrows. But the possibility of Russia losing its only seaport in the Mediterranean, having been leased a naval base on the coast since the 1970s, would no doubt have concerned Russian military leaders.
The weakness in EUR/USD could well continue past this initial move. The political willingness in the US to embark on an operation against Syria might be strong but voters are very much against it. Convincing the American public to add Syria to the list of Iraq and Afghanistan will not be easy.
Range-traders have had it all their own way in the EUR/USD cross for some time now, and it will be interesting to see how long this rally can last before the sellers come back in.