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Jul 24 - 06:55 AM

EUR/USD - COMMENT-Safe EUR/USD Longs Will Get Too Risky

By Jeremy Boulton  —  Jul 24 - 04:55 AM

EUR/USD longs won't be safe once enough traders have bought.
Then the euro will be a growing risk and it will be worth hedging a likely decline.
The greater the investment in a presumed safe asset, the less safe it is.

The pivot for risk taking and EUR/USD often occur when bets surpass 20 billion euros.
They can grow larger -- shorts during the euro zone crisis hit a record EUR 26.1 billion.

By July 14, traders held a 14 billion-euro long position.
EUR/USD has risen around 2%, reaching a 2020 high and longs will surely have grown, but it's unlikely they have reached market-stopping proportions.

With reason to buy mounting, EUR/USD longs will probably get too big.

U.S.-Sino tensions and the coronavirus crisis in the United Sates make EUR/USD longs appealing.
Today's PMIs suggest Europe's economy is recovering far more swiftly than expected, bolstering the bullish rationale nL2N2EV0A8.

This should take EUR/USD higher but maybe not far beyond 1.18 nL2N2EV081

For more click on FXBUZ

EUR/USD Click here

Refinitiv IFR Research/Market Commentary


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