The euro is considered safe, which has helped to underpin this year's EUR/USD rally, but big bets are vulnerable to rises in risk aversion.
With the biggest FX bet being EUR/USD longs, this poses a problem.
It's unlikely that traders are too long, but they are holding a substantial bet on a rise and lot of new positions were likely added this week.
That means longs have been purchased at elevated levels influenced by the break above 1.1500.
These bets are vulnerable.
Traders must decide whether to hold bets and suffer some pain or sell now and avoid a troublesome dip -- but also contribute to one.
Unless risk aversion evolves into crisis conditions, the dollar's safety isn't needed.
EUR/USD might dip to correct an excess, but it's unlikely to reverse course.
1.1458, 1.1406 and 1.1354 are correction targets for the latest EUR/USD rise.
A reverse is unlikely to happen until traders are much longer nL2N2EV0B3.
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