Short Sterling sells off

Inflation in the UK was surprisingly stronger then expected. That ruffled the feathers a bit as we sold off in the short sterling contracts and gave sterling currency some much needed strength. Short sterling like Euribors have seen its calendar spreads go steadily upwards for the last week.
Euribor spreads saw new short term highs, Jun10-Sep10 hit 22s before coming off slightly, Dec10-Mar11 touched high of 19, and Mar11-Jun11 reached high of 21.5. I was shorting it all the way up, which worked to an extent cause there has been pullbacks before next leg higher. That will remain my strategy if we continue higher.
Bunds as expected dropped even further touching the 123 level. From here I would expect a further run down to the 121.5 level where we have had previous support. If that pans out we would have a perfect head and shoulders pattern. If we were to go the other way we could establish a range between 124.5 and 123.