My interpretation of the overnight moves is that risk aversion is returning to the market and speculators are squaring up their risky positions before they go on holiday. If we remember back to the GFC, pairs like EUR/AUD and EUR/CAD rallied strongly and that’s what has happened this week also. The market has been short and bearish EUR/USD for some time now and is susceptible to these squeezes; the gold market has been overbought by leveraged players and they are forced to stop-out once it turns.
Good luck today and TGIF.
