EUR/USD: Expect support to be solid at 1.3165/70

A quick look at the daily chart shows why some traders are happy to start buying near current levels (see chart) and a PB source reports that bids are very solid near 1.3165/70. Much of the EUR selling in recent sessions has been cross-related with both EUR/AUD (positional adjustment) and EUR/GBP (M&A chatter) falling quite heavily. If the cross selling dries up then we should expect a short-term recovery in the EUR/USD.

• If support levels at 1.3165/70 are tested and prove to be solid, then I think the risk-reward associated with a quick long swing play would look very compelling.
• If the cross-selling persists and support levels can’t hold the first test, then I’d leave it alone for now.