A dead cat bounce is a sign of more selling to come

The euro fell 170 pips in straight line today, bounced 30 and is now back testing the lows. Many times, the size of the bounce is more telling than the magnitude of the fall.

The sub-20% bounce today screams to keep selling the euro.

The main thing is that now we have a date. Draghi circled December 3 on the calendar as a date when the ECB will consider a cut to deposit rates and more QE.

Unless there is a spectacular jump in Eurozone economic data, action is "on the table" for that meeting. That's a factor that makes it very difficult to buy-and-hold the euro. Any bit of good news or any bounce is an opportunity to sell.

There is a bit of support at 1.1143 but nothing more substantial until 1.1100/10.

I think there's another leg lower coming today but it's a tough time to sell until Europe is through the close and the flows surrounding it. The trade is to try and find a good level to short without waiting too long, because the bounces will be shallow.

For more on the euro, check out Greg's latest technical analysis.