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Thomson Reuters
Sep 10 - 06:12 AM
EUR/USD - COMMENT-Interest Rates May See EUR/USD Hit 1.12, Even 1.08
First appeared on eFXplus on Sep 10 - 04:10 AM

The rate gap between the United States and Europe looks set to widen enough to sustain a deeper EUR/USD drop through prior major supports around 1.14-1.15 towards 1.1200, possibly 1.0800.
When EUR/USD plunged through major supports in August, it did so quickly, amid growing risk aversion.
A snap back followed when the dust arising from Turkey's problems settled.
That drop saw major options knocked out and without their support the current interest rate-fuelled decline is likely to go beyond the August low at 1.1301.
U.S. rates climbed after it released jobs data, and the gap in benchmark rates with Germany is near its widest since 1990.
Speculators who very briefly turned short EUR/USD after the August plunge have since rebuilt the long positions they held before then, so they are ill-positioned for any drop.
A move back below 1.1448, which is 50 percent of the 2017-18 rise, targeting 61.8-76.4 percent of that same move at 1.1186 and 1.0863.

EUR/USD spec positions Click here

US/Germany 10-year yield spread Click here

Source:
Thomson Reuters IFR Markets

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