The Chinese data, whilst not great, wasn’t as bad as some had feared and of course the Spanish bailout has triggered heavy stop-loss buying of the EUR. Nevertheless, I can’t help but think this that this rally is all about triggering stops and when the market starts to think again about whether it should be holding EUR or not, we will get another wave lower.
I’m putting on my holiday strategy, as I’m just about to head off to Europe for 4 weeks, and I’ve gone short EUR/USD at 1.2650 with a relatively tight stop (for me at least) above 1.2700. If this resistance line holds near 1.2765/70 then the bears will come charging back again. (By the way, the prior support line was from 2001 lows at .8350 through 2010 lows at 1.1875)
