Forex Flash: EUR/USD: US premium over Germany moves in dollar favor - BBH

Early Asia built on the yesterday's euro recovery but ran out of steam near 1.3160, just in front of the 50% retracement of the sell-off from the early Monday high above 1.33, says the BBH analyst team. "On the pullback the euro briefly dipped below $1.3100, perhaps weighed down by sales against the yen. But there is a risk of a new run higher in North America today, with intra-day momentum indicators favoring a turn higher now from over-extended territory".

"That said, with the US premium over Germany (on two-year notes) continuing to move back in the dollar's favor, we remain inclined to sell into euro bounces", BBH says.