Neither the EUR nor the USD is in great shape at the moment so its a matter of market positioning and flows to determine the short-term trends and ranges.
Just like we had a 1.37/1.42 range pre-FOMC, so also I’d expect a 500 pip range in and around the G20 as developments emerge. I’m not sure whether the short USD positions have all covered or not but my best guess at this stage is 1.35/1.40 as the likely edges and I’m going to try and avoid getting caught trading in the middle of the range. I still believe that the primary risk in the market is for further (and perhaps sudden) USD weakness so my bias in EUR/USD is reluctantly to buy dips.
