EUR/USD bears remain in control, as the technical outlook is negative and a possible reduction of shorts provides space for a deeper drop in coming sessions.
In the week ended Nov.
5, IMM data showed the futures market was short by an equivalent EUR/USD cash position of 7.6 billion euros, up from 6.7 billion euros the previous week.
However, EBS flow data since Nov.
5 shows some of those shorts may have been exited, reducing the chances of a near-term short squeeze because there are fewer buy stops that might be triggered.
The near-term scope is for further losses to test the daily cloud base, now at 1.0967, in coming sessions.
Traders should be mindful that a strong defence of option barriers at 1.1000 is likely.
A break and daily close above the daily cloud top, now at 1.1064, would shift the bias back to the upside.