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Talking Points:

- EURJPY's big test won't come until 138.00.

- EURUSD could squeeze above 1.3440, 1.3475.

- Have a bullish (or bearish) bias on the Euro, but don’t know which pair to use? Use a EUR currency basket.

French and German Q2 GDP figures surprised to the downside this morning, and in conjunction with the weak Italian data last week, it was all but certain that the headline Euro-Zone Q2 figures would disappoint market expectations as well.

The issue is, and this is hard to measure quantifiably, that traders were expecting the weakness seen in the individual reports to result in a much weaker overall regional report. So when the q/q print just missed by -0.1% and the y/y came in at the money, Euro bears were left wanting more.

While the overall tone in the Euro remains dour given the region's growth and inflation issues, there have been some notable developments across the EUR-spectrum that warn of a potential move higher by the 18-member currency.

Recall, non-commercials/speculators have increased net-short Euro positions (128.7K contracts) to their highest levels since the week ended August 14, 2012 (137.8K contracts). Squeeze potential exists - see the video above for the outlooks in EURGBP, EURJPY, and EURUSD.

Read more: Time to Sell GBP: BoE’s QIR Spurs Key Reversals on Big Volume

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