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Thomson Reuters
Apr 08 - 07:24 AM
EUR/USD - COMMENT-If Status Quo Holds, EUR/USD Has Room To Drop
First appeared on eFXplus on Apr 08 - 05:20 AM

As things stand, EUR/USD is going to fall, so expected ranges will fall.
But if downward progress is slow, traders have plenty of time to prepare, and well- hedged markets don't move quickly.
However, slow markets also mean lower vols, which are bearish for the world's most liquid funding currency, the euro.
Bets on a drop are growing, and may one day fuel a correction, but not yet.
Euro shorts can grow much larger and be held for much longer than those in place today.
Prior extremes of betting were attained during risk-averse times; the number of shorts and longevity of these bets could logically grow much greater in today's risk-friendly conditions.
Shorts need at least to double before they become a problem.
That said, all periods of low vol are followed by big moves and spikes in volatility.
Should shorts reach 25 billion euros or more, it will become prudent to cover the risk of a squeeze.

eur shorts, volatility and eurusd Click here

Source:
Thomson Reuters IFR Markets

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