FX Breakout Monitor: EURUSD eyes breakdown
EURUSD has probed beyond the 19-day low close at 1.1344 today, while USDSEK is taking a look at its 19-day highs. We are also watching EURJPY on weaker risk appetite.
Head of Commodity Strategy, Saxo Bank Group
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The speculative dollar short against nine IMM currency futures increased by 29% in the week to June 12. This before its explosive move higher last Thursday following the European Central Bank meeting..
The net dollar selling was broad-based with the exception of EUR and not least MXN where bearish bets doubled as uncertainty about NAFTA weighed. Despite trading weaker, traders still bought JPY which took the net-long to a seven-month high.
In fixed income the overall short duration of bonds held by leveraged funds were reduced for a fourth week. The CFTC reporting period up until last Tuesday captured the sharp short covering rally on June 7 in US 10s while curve flattening trades continued to be in demand ahead of last week’s Federal Open Market Committee rate hike.