The latest IMM data covers the week from 28 October to 4 November 2014.
IMM data released last Friday revealed that for the fifth consecutive week investors added bearish EUR positions, sending non-commercial EUR positioning to the fourth percentile - the most bearish level since August 2012. The move reflects speculation about a dovish Mario Draghi at the ECB meeting on 6 November, which we now know he was (see Weekly Focus: Draghi did it again , 7 November).
The build in short-EUR positions increased the aggregate speculative USD positions to a new record high (see page 2). While positioning suggests a barrier to a further decline in EUR/USD, we believe the case for a stronger USD - also in the short run - is very much present with the market using all opportunities to position for a stronger USD. This is also reflected in IMM positioning where speculators remain long USD against all currencies in the report (see page 3) - something that before October this year had happened in only one week since 2000. We target 1.20 in EUR/USD in 6M but highlight that risks are skewed to these targets being reached faster than expected.
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