The market is bearish EUR and is always keen to sell as last week’s CFTC data showed. Remember, its the speculators who are bearish and short. All bank research that I’ve read in the last few months show that real transactions are EUR positive. If the market bias returns to neutral then EUR/USD will probably be trading 1.33/1.34 and if sentiment turns bullish, then EUR/USD will be trading back near 1.40.
With the Greek debt saga likely to leave the headlines for a few weeks if not months, the EUR bears might struggle to maintain their patience and this suggests to me that the big risk in EUR/USD is to the topside.
Looks like there could be an option barrier at 1.3000 but if this breaks watch out for some more sharp short-covering. Support should be firm near 1.2940.
I’m going to trade this view through a small EUR/JPY trade which you can follow in the members section.