Factors weighing on EUR/USD are growing while traders have reduced bets it will fall.
That is likely to lead to a bigger drop, but vols near record lows mean traders should expect a slow slide and lower ranges, not a steep decline.
The gap in interest rates hurting EUR/USD may not change.
Data suggest the U.S. economy doesn't need much support, the Federal Reserve looks likely to provide some anyway.
The dollar should do well.
The euro zone is struggling and the European Central Bank looks set to ease, so the gap in rates isn't going to narrow for long.
Unlike Fed stimulus, an ECB rate cut would push rates deeper into negative territory.
As cash is searching for higher yields the euro will suffer, but it will suffer slowly.
The EUR/USD range has fallen gradually this year to the current 1.11-1.14.
Fewer traders are short, so it's likely to slip to 1.10-13, but huge option interests will underpin that range and a big rise in shorts is likely.
EUR/USD shorts and vol Click here