There are a lot of things to worry about in Europe: Italian political chaos. Cyprus. The mouthing off of Eurogroup President Jeroen Dijsselbloem.
As such the
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SocGen's Sebastien Galy writes:
We almost reached our first target of 1.28 in EURUSD, opening up the next level at 1.26, both levels driven by our models. It suggests a strategy of selling on short covering to target the new lower range with a bottom at 1.26. As a reminder our year end forecast goes into the 1.20s. Models have worked surprisingly well for eurusd (for us not our twin), the last short covering came close to 1.31 given by the 80 percent quantile model, though our traders nailed it perfectly with a call for 1.3050.