SocGen on the euro
Societe Generale Research discusses EUR/USD outlook and notes that range trading conditions seem to be the name of the game in the near-term. SocGen holds a long EUR/USD* with a tight stop at 1.1095.
"CFTC data show euro shorts still increasingly slightly, and while they aren't yet at record levels, this will continue to provide some support. The market remains bearish and short and the currency's valuation reflects that. A weaker yuan adds to the long list (weak growth, dovish ECB policy, very low Bund yields) of reasons why a decent rally is almost impossible to imagine, and range-trading will continue,' SocGen notes.
"At the same time however, the market's long DXY position is being cut back. It doesn't look like it'll be the euro which is the winner but DXY positioning did lead the 2017 dollar fall and with a President who seems so keen on avoiding a strong currency, it really is only the lack of alternatives that is holding it up," SocGen adds.
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