I leave you kids alone for a just a few hours…

By: Jamie Coleman

...and I come back to see that you've had a party and raided the liquor cabinet. EUR/USD has broken to multi-month highs after vaulting 1.3308 early in the US session. Ongoing expectations that the ECB has halted the contagion from PIG and kept Spain and Italy afloat by providing a safety net via the OMT. News that Spain's Sabadell is set to payback 20% of LTRO funding this month is helping the euro as well. That helps shrink the ECB balance sheet and it shows a modicum of strength in the troubled Spanish banking sector. A continued large slide in the JPY contributes to the bid tone in EUR/USD as EUR/JPY adds what feels like a big-figure a day. 120.00 is a big, fat target for the EUR/JPY bulls which feels almost inevitable at this stage. 1.3305/10 bids are seen on dips near-term while 1.3380 is next resistance on the daily charts. We trade now just above 1.3350.