EUR/USD traded near flat Thursday despite upbeat risk sentiment, and investors positioned long may be growing uncomfortable as bearish influences mount.

EUR/USD failed to rally after leaders from China, the world's second largest economy and a large trade partner of the euro zone, pledged to boost fiscal spending in an effort to meet growth targets.

Riskier assets rallied on the news.
USD/CNH fell to a fresh 16-month low while stocks ESv1 and gold XAU= fresh record highs.

EUR/USD investors may be more focused on France's fiscal and debt issues which drove France's borrowing costs above Spain'sFR10ES10=RR for the first time since 2008.

Investors may see growing risks of the ECB cutting more aggressively than has been expected in an effort to tame those borrowing costs.

German-U.S.
2-year yield spreads US2DE2=RR widened to levels not seen since Sept.
11 and increased the dollar's yield advantage over the euro.

EUR/USD longs may also be looking at the terminal-rate spread for the Fed SRAM26 and ECB FEIZ5, which has been moving in the dollar's favor.

However, U.S. August PCE and September payroll reports could fuel a EUR/USD rally if they indicate softer pricing and job markets, which could give the Fed reason to cut aggressively in November.

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