If the ECB didn't deliver, it's time to retrace
The push above 1.09 broke the November 5 high to the best level in a month. The selling over the past month came on expectations of dovish policies and the ECB only did about half of what's expected.
So how about we retrace half the move? The 50% level is at 1.1010. A few of the major moving averages are also in that vicinity.
It takes day to squeeze out shorts. Moves like this tend to last days so if anything, I'd be on an even bigger gain. Forget the overbought/sold indicators after a fundamental-driven move like this one.
The only hope for euro shorts is that non-farm payrolls are strong and the US dollar rallies more broadly. That's why selling the euro against a basket of currencies is probably the right trade.
The session high was 1.0942 as the squeeze took hold but it's pared back to 1.0897 now. Look for spots to buy.
