EUR/USD is in short-covering mode as the market fears the Fed will launch another dose of quantitative ease given that they had discussed the possibility even before the dreadful June employment report.
I think there is a low probability of QE3 happening unless we see a return of deflation threats as monetary policy has shown it has limited ability to boost employment, at best.
Despite that, traders have a way of letting their emotions get the best of them….
Should EUR/USD clear the 1.4065/80 area, 1.4100 looks like a good place to start building shorts…