The Euro is in free fall. And Goldman Sachs is not helping, as the firm reiterates it has a core short position on EURUSD. Alas, Goldman's 1.2880 support level was just taken out. Watch out below.
In classic FX fashion last weeks violent short squueze ahead of the weekend announcement of the rescue package just worked to trigger the extended move lower from Sunday nights 1.3365 high . With the 'good news' in the market and priced the euro remains vulnerable to any fresh cracks , further negative speculation or bad news flow and the risk lies firmly to the downside . Many will have missed this last and sharpest part of the move lower and it’s now a tough level to initiate shorts . We are still holding a core short because as uncomfortable as it may be to be short at these levels it is hard to know how far this move might extend and to square up is to potentially miss a move which could extend a good deal further . So we are staying short and would look to add should we retrace to 1.3025/50 . Good resistance should emerge at 1.3100 and a stop could be placed above the previous low on the year at 1.3114 . To the downside 1.2880/1.2900 should offer some support given option interest and tech objective . Last years low of 1.2457 is not beyond the realms of possibility , but one step at a time for now .