A 4 or 5 point bounce in the S&P 500 is prompting dealers to cover stale shorts after failing to overcome the area of support down around 1.3260/70 despite exploding Greek yield spreads and CDS prices.
Small stops above the 1.3320 level have been triggered and it looks as though a bottom may be in for the day.
Fundamentals remain awful for the euro as uncertainty over the size and shape of the Greek bailout remains high. That said, you can’t beat a dead horse forever…A short-term bounce toward the 1.3350/80 level looks likely near-term.