A new week begins with the same old news. The EUR moves back and forth in the same trading range as traders and analysts await the time when Spain will finally ask for a sovereign bailout. This causes erratic moves in the currency, when there is the slightest rumor that some news is imminent. That has happened this morning at the London opening as the EUR jumped from the 1.2900 area to 1.2950 in a matter of moments. On a day with little data releases due, the markets will make moves like this. There are no economic data releases scheduled today from the Eurozone and in the US, we will see retail sales release and the NY Empire State manufacturing index. The consensus on these releases is a slight drop in retail sales and an improvement in the manufacturing index. The latest jump in the currency has been linked to some short squeezing after the currency could move no lower than the 1.2890 support level. There are reported sell orders above the 1.3000 level that are supposedly corporate driven, which should keep the currency within the traded boundary that has existed the last few weeks. As far as Spain is concerned, now observers are looking towards November as the possible time when the country will formally request a bailout. According to the Spanish Finance Minister, there is no hurry to seek a bailout since feelings have turned more optimistic towards Spain than they were a few months ago. While it is obvious there will be a bailout request the market will continue to stop and start on any news out of Spain. In other currency news, the AUD stayed under pressure despite the fact that the Chinese government released stronger trade surplus data, with the report showing the surplus increased to USD 27.67 billion in September, up from USD 26.7 billion in August. The consensus was for a surplus of USD 22.4 billion. Analysts are concerned that this number could be a one-time pop. The fact that the AUD hasn’t moved higher has traders concerned here. The EU Summit meeting takes place later this week on Thursday and Friday, but the markets are not expecting any major news items to come from this. There are some regional elections in Spain this week from the provinces of Basque and Galicia, but these are also expected to go off without a hitch. There was a report that come out through the Reuters news agency over the weekend that stated according to EU officials, the Spanish aid request will be put together witha revised Greek loan program, along with one for Cyprus. According to the report, bundling the three bailouts is a preferred plan as it will eliminate multiple national parliamentary debates and speed the process. According to the CFTC, EUR net shorts rose again to 72.3 thousand contracts on October 9, which is up from the 50.3 thousand contracts a week ago. GBP longs were lower during the week and JPY contracts were unchanged. The feelings on AUD were drastically changed as long contracts fell to 39.8 thousand from 89.6 thousand two weeks ago. CAD longs also were slightly lower. The move in the EUR this morning certainly looks like a “short squeeze” given the information from the CFTC. Lately, it seems as though the opening of the North American trading session brings the EUR higher. If that is the case this morning, we could test the upper boundaries of 1.3025. Failure to break there would keep the EUR within its 1.2870-1.3025 trading range as we begin the week. Matthew Lifson Matthew Lifson Matthew Lifson is a Foreign Exchange Trader and a Market Analyst. with Cambridge Mercantile Group. View All Post By Matthew Lifson Forex News Today: Daily Trading News share Read Next EUR/USD Oct. 15 – Higher as Greek Talks Progress, Strong Kenny Fisher 10 years A new week begins with the same old news. The EUR moves back and forth in the same trading range as traders and analysts await the time when Spain will finally ask for a sovereign bailout. This causes erratic moves in the currency, when there is the slightest rumor that some news is imminent. That has happened this morning at the London opening as the EUR jumped from the 1.2900 area to 1.2950 in a matter of moments. On a day with little data releases due, the markets will make moves like this. 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