Looks like traders are heeding our warning not too get too short at the lows. China generally protects barriers, especially when they are this close to expiry, so despite a further drop in equities and a drop in bond yields (classic risk aversion symptoms) traders are reluctant to sell EUR/USD willy-nilly in an area from which we’ve bounced 3, 4, 5 cents in the recent past. Can’t blame them, tough if prices continue to slide there will be fewer on board to enjoy the ride; a classic catch-22. Stay short a small position but leave a trailing stop above the 1.2785 level.