EUR: Looks like market needs them
Big difference between needing and wanting, and at the moment it looks like the market is in desperate need of some Euros. Most of the big speculative short positions have been significantly reduced over the last few weeks but there are still a few shorts out there who must be getting nervous in very thin markets.
My sources in the debt markets tell me that its mainly one way traffic now into the EZ debt markets. The EUR is seen as a safer haven than either the US (fiscal cliff) or Japan (getting ready to spend big) and with yields higher anyway in Europe, its little wonder that real money is flowing that way.
Liquidity is poor so moves will be exaggerated, and my gut-feel is not be trying to sell the EUR over the next week or so until the market returns to normal liquidity.
EUR/USD has taken out an hourly high at 1.3250 and is now eyeing 1.3295.