What a difference a day makes, 24 little hours, as the old song goes. Everybody and their dog was so bearish (dollar) the past few days that it seemed inevitable that the old 1.30 EUR forecasts would come to fruition, however following the linear shift in spot post- NFP the investment banks are singing a different tune.
The drop in bond prices, and the concurrent shift in Fed cut expectations (off 15bp priced via futures already) has the E mail missives being sent out already. Topside failure at 1.2800 being a common theme, with a very prestigious US investment bank targeting 1.2550 EUR/USD again, and 120.00 USD/JPY. They are also waxing philosophically again about EM markets giving up ground in these next two months ala the summer crisis.
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