By eFXdata — Feb 26 - 08:30 AM
Société Générale Research discusses the EUR outlook and flags a scope for a bounce on short covering if prices continue to go sideways for longer.
"As for the euro, we're in watch-and-see mode. Sentiment remains bearish, given the weak growth backdrop, lack of policy dynamism and vulnerability if the virus epidemic starts to spread," SocGen notes.
"But the market is short due to a concentration of large positions that outweigh a greater number of smaller longs. If the euro goers sideways for too long, short-covering is a distinct risk, that is not captured by the options market here," SocGen adds.
Société Générale Research/Market Commentary