EUR/USD: Weak trailing stops triggered below 1.2850

EUR/USD is back below 1.2850 in the aftermath of the S&P downgrade of Spain. Dealers report trailing stops below 1.2850 have been targeted and triggered.

The downgrade needn’t necessarily be bearish for the EUR; Spanish bonds are still investment grade and this S&P move might encourage Spain to ask for the bail-out.

I’d play a 1.2830/80 range intraday with a mild bullish bias whilst the 200-day MA still supports.