Just when you are starting to feel comfortable with a strategy, something comes along to upset the view. I was feeling quite confident that EUR/USD was forming a base but the sell-off in EUR/JPY after the poor Chinese export data has unsettled my opinion. I’m now back in a more familiar “not sure” mode.
EUR/USD fell to a low of 1.2635 but is now back at 1.2660, a very modest recovery. Bids from Sovereign names are expected again at 1.2550/75 but do not be surprised to see them off-loading these longs on rallies back to 1.30. Range trading has taken over for everybody.
