EUR/USD is extending its short-covering rally, triggering stops above 1.2600 as the reflation trade is born anew. The S&P 500 is up 2.5% and the CRB index is bouncing back, up 3% (after bottoming earlier this week at critical technical support of 200.00).
1.2650 is next resistance for EUR/USD, the session high in NEw York about 24 hours ago. 1.2675/80 is more solid resistance. Stops are perched above both levels. We’d be very reluctant to fade this rally as overesold US equities could lead the way higher.
