Short-covering seems to remain the dominant driver of Euro price action, with spot prices showing a strong inverse correlation with the IMM measure of net speculative short positions on 13-week percent-change studies. Positioning is still skewed to the short side relative to its long-term average, hinting that there is still significant room for continued readjustment to send the single currency higher in the near term. Domestically, the main event will be the release of results from a series of stress tests of European banks designed to gauge their ability to withstand a sovereign default in the region. These will determine if the ECB will renew long-term repo operations (LTROs), and outcome that would deepen the liquidity pool and weigh yields, sending the Euro lower. July’s preliminary Euro Zone PMI and Consumer Confidence figures as well as Germany’s IFO survey of business confidence are also of note.