EUR/USD dips to 1.3960 support as longs continue exodus

EUR/US has fallen back to the 1.3960 area as longs continue to head for the sidelines in frustration. Animal spirits were whipped up over the last 24 hours only to come unglued in US morning trade. Small central bank buying has been seen on this latest dip with the more active trading CBs playing both sides of the market today. In the medium-term, large stops are building below the 1.3800 level. Until that level breaks, look for whippy price action in the 1.38/1.43 region in the days ahead. Prices have retraced more than 50% of the jump from 1.38 to 1.4145. The 61.8% retracement comes in at 1.3931. Important support for Cable is approaching between 1.6290 and 1.6300. Another crop of stops lies below that level.

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