IMM Positioning: Positioning Limits EUR/USD Downside Risk‏

Published 08/11/2014, 07:38 AM
Updated 05/14/2017, 06:45 AM

The latest IMM data cover the week from 29 July to 5 August 2014.

IMM data released last Friday revealed yet another week of net EUR short builds, sending non-commercial positioning to the most bearish levels since November 2012. This week's move probably reflects speculation about a dovish Draghi at the August ECB meeting as well as the continuation of solid figures out of the US. The total residual positioning in USD continues to looks very stretched at the most bullish levels since July 2013. This week's move in speculative USD positioning was primarily driven by speculators' bearish builds in EUR and JPY (see page 2). In sum, positioning has over the past three weeks significantly limited the short-run downside risk in EUR/USD. Having said that, we still expect EUR/USD to gradually edge lower, primarily driven by a divergence in relative monetary policy.

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