It looks like the ECB statement yesterday may well be the event which ushers in some major short-covering in the EUR crosses. The long-term speculative market has been short pairs like EUR/CHF and EUR/AUD for some time but an aggressive tightening stance by the ECB might be enough to initiate some major short-covering. If this happens, we can expect significant moves.

The next question is whether this short-covering happens mainly through the EUR/USD or through the component pairs like USD/JPY and USD/CHF; or as a combination of both. My guess is that it would be the latter.

Good luck today and TGIF.