How can you tell its a squeeze? Because the market is doing the opposite of what it “should” do.
The weak Philly Fed, to the extent that it is representative of the condition of the broader manufacturing sector, should have provoked a risk-off reaction. When it did not, already nervous shorts set about covering their positions.
We’ve reached a high of 1.28025 so far.
With Greek debt sustainability a long way off and Spain still dragging its heels on an aid request, the rally probably does not have too much further to run. I like fading rallies toward 1.2850/75 with a stop above 1.2890, still looking for a 1.2500 target in the weeks ahead.
