EURUSD: Short positions re-established – BBH

By FXStreet FXStreet (Delhi) – Research Team at BBH, suggest that seeing the price action of Euro after the fed post, it looks like the euro shorts has been re-established and we are headed for downside in the EURUSD pair.

Key Quotes

“The euro peaked near $1.1460 post-Fed and fell three cents subsequently. It bounced off the $1.1155 area in early Europe today but ran out of steam near the 200-day moving average (~$1.1210). It closed yesterday below the uptrend line drawn off the early August and early September lows. That trend line is found near $1.1225 today.”

“Between the run-up to almost $1.1715 on August 24 and the post-Fed rally, many leveraged short euro positions were forced out. The recent price action suggests they are being re-established.”

“The divergence that is at the center of our bullish dollar outlook has two potential moving parts. Since ending QE3, the Fed has stood pat. The driver thus far has been what other central banks are doing. Draghi can be expected to assure the European parliamentarians that the ECB’s asset purchase program is flexible and that officials are still trying to determine how recent developments impact the central bank’s goals. …read more

Source:: FX Street