There is talk of very large bids in the 1.3400/20 region and some technicians are also of the view that it will take a weekly close below 1.3380 to ignite bearish momentum again. The big hedge funds are short and bearish and I’m sure that they will do whatever they can to ensure a bearish break. That said, they will also have pain threshholds but I’m sure they will try and hang in there until at least 1.3850.
If we cannot break below 1.3480 and test the recent lows by mid-week, then short-covering will probably kick in as usual, causing a rally to 1.3800 by the end of the week. On the other hand, if we are trading near 1.3400 on Friday, you can be sure the big speculators will throw the kitchen sink at it in order to ensure a bearish break.
