I am of the opinion that we are now entering a phase of serious short covering and that markets will be very volatile. The EUR/USD looks like it might have found an interim base at 1.2150 and we saw a spike top only two weeks ago at 1.3100- I’m going to try and trade the outer edges of this range without any discernible bias. The EUR is still very vulnerable to it internal debt woes but is very oversold and shorts are starting to cover.
We’ve been saying for the last few days that the ‘clever’ accounts have been buying on dips. Now we know why they have earned this reputation.