Westpac - "We have opened a short EUR/USD position at 1.3012, targeting a run at the 1.27-1.28 zone.
As today's price action following the decent US payrolls shows, the USD appears to be in the midst of a correlation shift that gives it the look and feel of a pro-cyclical growth currency that responds positively to good US news. We have reservations around seasonal biases which tend to inflate the US data early in the near but close inspection of a wide array of US data between 2010-2012 suggests that this can last through to April/May. Against that backdrop, Westpac's US data surprise index is at relatively low levels, implying that expectations are not overly bullish (yet).
The Italian Parliament reconvenes next week too, 15 March, and that is likely to place the political deadlock there back in the spotlight.
(...) Altogether it's difficult to see EUR sustaining a multi-day/week bid against this backdrop. We will add to the trade into 1.3100 and stop out of the trade through 1.3200."