A strong intraday rally yesterday took the EUR/USD from a 1.2580 low to highs above 1.2800. This is a significant move and even though some significant gains were given back in late NY trading, my sense is that much of this was cross readjustment. For much of the Asian session yesterday we saw a relatively new phenomenon, USD selling across the board and I feel we may be entering another market phase similar to the one we saw in December last year when the EUR/USD rallied from 1.25 to 1.45. Searching for fundamental reasons for such a move is pointless- the market has to move one way or the other and if it cannot go down, then the shorts will bail and we will see a major short-covering rally to let some steam off.
The clincher for me was an article in the UK Telegraph earlier in the week speculating on a major collapse in the EUR. The article is 6 months late!
Good luck today.
