BAML write that Italy news may have.....>

EURO-DOLLAR: BAML write that Italy news may have reached peak negativity

yesterday and the markets' focus and reaction certainly could not be much more

sensitive going forward. This, combined with the strong outperformance of US

equities in the past month and impending Month-end re-balancing tomorrow, all

make BAML a little worried about holding an excessive EUR/USD lower conviction

close to 1.1500 in the very micro term. There are many possible headlines which

could catch the market short risk yet the continuous drip of negative headlines

are in danger of losing their lustre.

BAML add that a break back above $1.1590/1.1605 would likely force the hand of

the short term market, and that $1.1500 may be a step too far for EUR/USD. A

move close to 1.1700/1.1740 would offer an opportunity to reinstate a meaningful

EUR/USD lower conviction again.