The best EUR/USD strategy may be a simple one which accounts for current levels, positioning, sliding volatility, and interest rate returns.
With that in mind EUR/USD may have reached levels worth selling.
EUR/USD has soared since September with traders aggressively buying, flipping a 6 billion bet on a drop to an 18 billion bet on a rise.
This big bet is roughly equivalent to the total of all bets made on dollar rising in 2022.
Large speculative positions are usually reverse indicators and because many of those long are making money, the drop in volatility is cause to anticipate profit taking.
Should this occur it will be near big levels as 1.0938 is 50% of the 2021-22 drop, and this year's high at 1.0930 is the top of the weekly Ichimoku cloud.
These big points are hard to cross and are just shy of 1.1000 which is hugely important for hedging purposes - a point likely to draw big selling interests.
Should the rally stall, the dollar's yield advantage - seen 1.5% throughout 2023 - will matter.
Ranges may slip from 1.05-1.10 towards 1.03-1.08.
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