Morgan Stanley entered a short at 1.3620 last week. They are looking for 1.3100 and have a stop at 1.3700.

They say the euro rebound has remained limited and that weakness in tomorrows euro data (French manufacturing, GDP & PPI, Italian mfg, EZ economic sentiment, German CPI) will add to the bearish news for the single currency.

They say any gains will be limited to the 200 dma at 1.3670 and a move back below 1.3600 will open the door to a look at the 1.3500 area.

One trade that is going well for them is their short from 102.20 in USD/JPY (target 98.00 sl 102.70). A sustained move below the 200 dma would be a bearish signal.

Nice trade on the dollar yen but the euro is making it hard work for shorts as it maintains its teflon moniker. We’re not moving far in either direction in what is a finely balanced market at the moment.