Tales of woe are making the rounds as many dealers who exited long EUR/USD positions below 1.3130 this morning jumped back in to the market in the 1.3170s only to see EUR/USD fall all the way back into the 1.3120s. Year-end illiquidity has not been much of an issue until now, but dealers expect that we could begin to see players drop by the wayside into year-end as the near-term trend becomes increasingly less clear.
US yields continue to drop but traders look to be more inclined to trim longs into strength than add to them today. 1.3100 support is now more crucial than ever, with more stops building from newly added-to positions eyed below that level. 1.3065 is modest support below the market, the 50% retracement of the rally from 1.2765.
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