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Sep 20 - 07:55 AM

EUR/USD - COMMENT-Big Swing In EUR/USD Betting Before Fed Hikes Is Crucial

By Jeremy Boulton  —  Sep 20 - 05:35 AM

EUR/USD traders have pared 87% of the bets they had placed on a drop before the Federal Reserve's policy meeting.
This is crucial and will likely lead to enduring decline that extends to the limit of bearish expectations. nL1N30R0KU

Following the ECB's 75 bps hike traders pared most of the shorts they held, with EUR/USD reaching 1.0198 from 0.9864 before dropping back below parity.

Trading with a trend is easier than trying to counter it, yet traders have never truly embraced the current trend since it began at 1.2266 in May last year.
The reluctance to sell or the will to counter trade has supported a drop that has continually exceeded expectations this year, and will probably continue to surprise most economists who still think that the pair will rise in the year ahead.

The few who predict a fall will likely be proved correct, with the lack of bearish bets supporting a move to the most bearish forecast of 0.9000 by March 2023.

Commentary by same author nL1N30R0CA


For more click on FXBUZ


Source:
Refinitiv IFR Research/Market Commentary

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