Additional bearish EUR/USD bets added ahead of ECB – Danske Bank
By FXStreet FXStreet (Delhi) – Kristoffer Kjær Lomholt, Analyst at Danske Bank, notes that according to the latest IMM data covering the week from 24 November to 1 December 2015, revealed that it was the sixth consecutive week of bearish EUR/USD builds.
Key Quotes
“While the change in last week’s non-commercial EUR positioning was only minor compared with the previous weeks’ bearish builds, it still highlights the significant expectation build-up in FX markets of Draghi delivering at Thursday’s ECB meeting. As we now know, this was not the case. As a result, the bounce in EUR/USD was unsurprising given the historically stretched level in positioning.”
“While last week’s report has non-commercial EUR positioning at the 6th percentile, we suspect that short covering since the ECB’s meeting has sent this level significantly higher. However, focus will now turn to the Fed and with a great deal of short bets covered, we believe it will open up for some modest EUR/USD short-term downside potential this week.”
“While the FOMC ‘dots’ may be revised in a more dovish direction in December, we still project a more aggressive Fed in 2016 than is currently priced in. We see EUR/USD under pressure from this side in 1-3M. A rebound in …read more
Source:: FX Street
