EUR/USD/Flows and Orders

EUR/USD: Potential ranges getting even tighter

As we know there is very solid technical resistance at 1.3085, which is the neckline for a possible double-top formation. This level also proved to be the high last week. On the downside, large buying interest from reserve and asset managers proved impossible to fill when we last visited near 1.2800 and I’m now hearing that some of this buying interest has moved up and is starting at 1.2915. Looks like we are in for an extended period of ever tightening range-trading.

  1. Morning Sean,

    There was a piece from IFR yesterday how hedge funds “are being more aggressive than other types of institutional investors in cutting costs on trading desks because of depressed activity”. Do you think falling volumes and range trading will continue until there is less central bank intervention?

  2. Prob yes Milan, looking at eurusd as an example, big asset n reserve managers either side of 128/132 range and it can hardly move. Similar case in cable where ACBs bought large 157/158 n then sold 16250. Volumes are so big the HFs can’t move the mkt, that’s why they are all trying to short AUD now and force a move, IMHO

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