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Mar 13 - 06:55 AM

EUR/USD - COMMENT-SVB Collapse Gives EUR/USD Traders An Unexpected Opportunity

By Jeremy Boulton  —  Mar 13 - 04:35 AM

The collapse of Silicon Valley Bank has boosted EUR/USD giving traders who would otherwise have been faced with the more difficult decision of selling at lower levels following strong payrolls data, the opportunity to make more money on their bullish bets.

Traders have been sitting on roughly 22 billion dollars worth of bets that the pair rises for weeks, only for the pair to flounder in the wake of the release of a hugely surprising payrolls report at the beginning of February.

After that surprise EUR/USD dropped from 1.1034 to 1.0533 EBS and was relatively close to the low for that move before Friday's events.

While Friday's payrolls report again surprised higher, the unexpected collapse of SVB dominated proceedings, fuelling a risk averse shift against the dollar.

This is undoubtedly a short-term reaction that offers those betting EUR/USD rises the chance to make more money.
If there were contagion and a wider crisis the dollar will rally, as seen in other crises, and it could rise far.

If markets settle this week then EUR/USD should revert to the factors ahead of the SVB news and so will very likely slide again.
It's probably close to the top.

For more click on FXBUZ

Refinitiv IFR Research/Market Commentary


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