There are certainly some very large short positions in the market but they will be in no hurry to buy them back, whilst the bear trend is so strong; the market does get it right sometimes. Real money accounts have been selling as they switch out of EU debt and European banking shares in particular. This selling has, if anything, been picking up pace in recent days. If I was clever enough to be short from the mid 1.30’s I’d probably have trailing stops now above 1.2875 and 1.3050.
Merkel and Sarkozy will meet again on Monday as the search for a long-term solution to the EU debt crisis continues.