It’s doing what it should have done immediately after the data…Not sure what the delay was, other than supply, but EUR/USD is doing exactly what you would expect after a blockbuster US retail sales report. Anyone who was betting on a US recession is now in a full-fledged panic and covering their risk shorts.
I have to assume that process is close to played out but we are unlikely to revert to a total risk-averse situation without a major downside surprise. What would be the surprise? Secret deficits on a grand scale in a vulnerable country coming to light… A fight between France and Germany over who pays the bailout tab… something out of left-field.
1.3900 barriers are the near-term hurdle while 1.3935 is the major near-term bull target.
