EUR/USD weekly preview, October 14th: Range trade with bullish bias

     There is a very clear range-trading pattern in EUR/USD at the moment, with highs between 1.3050/80 and a base near the 200-day MA at 1.2825. Speculative EUR shorts increased by around 40% in the week to October 9th yet this had no major impact on the level of the EUR. Big reserve and asset managers have been playing the range as well, adding plenty of liquidity near the top and bottom. Asian central banks were noted buyers on Friday near 1.2920 and US corporates were noted sellers at 1.2980. Market sentiment remains very bearish towards the EUR but if the range-trading mode continues, the odds increase that a bullish break eventuates on the back of short-covering. [Some pairs like EUR/CAD are showing excessive short positioning and could also be well worth a look]. On the data front, US retail sales and the Empire Fed survey on Monday are the first risk events for EUR/USD with the German ZEW survey released on Tuesday; US industrial production and Philly Fed come later in the week.

  1. Morning Shaf, yes mild risk on I’d say but don’t expect any big moves with range trading still dominating. Plenty of sellers in AUD/USD 10300/20 and that will take time to work though so best be patient and wait to buy dips

    1. Sean, the huge increase of the euro shorts took place at an average 2961 price level. Don’t you think if the euro were able to climb to 3030-3050, then its rise would accelerate? the new shorts would start covering quite soon….

  2. Good morning Sean,

    I hope that your week end has been relax
    Friday has been good day for me on EUR/AUD ;-). Did you held your position on the cable ?

  3. Bit of a lost week last week, small loss but felt pretty clueless all week. Nice that you had a win to end the week, makes the w/e feel more enjoyable 🙂 I’ve only got small positions still in cable and AUD/USD, don’t have very strong view, may try to buy EUR/USD 12870ish if we see an early dip

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