The fact that China might or will buy Portugese bail-out bonds is nothing new. The market has probably been caught short EUR/USD in particular and is using this ‘news’ as an excuse to trigger short-covering stops.

I’m hoping for a rally towards .8705 in EUR/GBP to set some intraday shorts. I think that if Europe walks in and sees EUR/CHF and EUR/GBP higher on the back of this FT headline, they will smash it back down straight away.