If Friday's strength was supposed to be the preamble for an assault on the old highs above 1.44, then today's early action is a disappointment for the bulls. Granted, it is early in the week, but this pair may be loaded with EURO longs in search of instant gratification.
The weekend press releases from the government officials meeting in Jackson Hole Wyoming were cautious but optimistic. What else would you expect from a group who are government spokesman from both sides of the Atlantic, hopeful that economic activity and tax receipts will pick up, so they avert further crises and keep their jobs?
Is it the summer doldrums that has contained volatility, with traders occupied by other activities? While the uptrend appears solid, the entrenched longs may be getting impatient.
Sometimes markets can forge ahead into new high ground during quiet times, but you generally need a sponsor with deep pockets. If the COT futures report is indicative of the FOREX set up, the small specs are the longs and the commercials are the shorts. This means deep pockets is the short, and this may give us a market that does a bit of churning, as the bear is too big be bullied.
Perhaps some new fundamentals will prompt the commercials to flip their positions, but until then we may be stuck here.