What do we do for an encore? The market went through a spasm of cross selling late in Asia, early in Europe while cable hit the skids after Merv the Swerve said inflation could fall out of the bottom of the UK’s target band. EUR/USD fell below 1.4100, triggering barriers and some of the big stops that are said to reside in the 1.4080s. More are seen toward 1.4070.
US trade figures have not been a big market mover of late but are important for macro reasons laid out in our earlier post.
Having tried the downside and rebounded, the risk near-term would appear to be a EUR/USD short-squeeze. A move through 1.4185 will force some covering near-term while back above 1.4220 will prompt a more substantial bounce. We trade now at 1.4168.
