Euro (and consequently equity) bounce coming

The Euro hit a panic low today around $1.22 intraday. This likely marks a short-term bottom in the eurodollar cross. Already in afternoon trade it has recovered all the way to $1.24. I suspect equity markets may get a bit of a boost tomorrow as the euro may rally on shortcovering to $1.26.

This short-covering will be ahem...short lived. I expect the euro retest the 1.22 area again in the next week or two, and I expect substantial market intervention from central banks again in this area to try to build an artificial bottom.