Looks like the market-makers are still nursing shorts after EUR/USD’s sudden reversal at mid-morning in NY.
Dips are quite shallow, barely below 1.2230 while supply lies overhead at 1.2260 on up to 1.2300. Small stops are seen around the 1.2265 level from the guys caught short earlier in the session.
Looks like we may have put in a short-term bottom on the intraday charts with a double bottom in the 1.2160/65 area. A rally to the 1.2320 area could unfold if the textbooks are to be believed. Buying dips to 1.2220 with a tight stop for a 1.2320 target looks like a reasonable play if you’re willing to take home a EUR/USD long, not something everyone is comfortable doing amid a crisis environment in Europe.
EUR/USD trades quietly at 1.2238, supported by a 1.5% rise in stocks and bounces in most commodities.