Euro Shorts Still Loading

Another week and some short covering is emerging in the Euro. At last we have had some movement in the euro in an upwards direction, do I think it will last, well the market doesn't seem to think so.

With the release of the latest round of COT data yesterday, we have yet another increase in euro shorts to 107,000 from 102,000 the previous week. I also notice the rejection of EURUSD at the top of the daily resistance zone starting at $1.38. It's pretty significant that eurusd didn't even get into the $1.38 's before the uptrend was shutdown and there is resistance dotted all the way into the high $1.38 's, it indicates to me that the amount of shorts parked at $1.38 was more than enough for now.

At this stage with the evidence stacking up against the euro, its becoming clear that Euro could easily fall to $1.30 against the USD in the short term, I don't think the market is completely short yet and can still go some more. The issues of sovereign debt are definitely running out of steam, and the market will need another trigger for the next push down, perhaps we may come back to the issues of banks in the euro zone whatever it finally turns out to be make no mistake most traders are only betting one way.

Good Luck all