Resistance in the 1.2725/35 region has stalled the impressive EUR/US rally thus far today. Goldman Sachs earlier issued a buy recommendation for 1.3500 with a stop below the 1.2300 level. Goldman feels the Central European credit story is overdone. Some of their hedge fund clients have apparently taken them up on their recommendation, traders say.
1.2725 resistance held the first time up. 1.2733 is the 38.2% retracement of the drop from 1.3093 to 1.2514. Expect more short-covering on a break.
