US Dollar to Decline on Extreme Forex Positioning Read more: DailyFX - US Dollar to
Posted 02-24-2010 at 10:34 AM by DailyFX
Forex futures and options markets have aggressively bet on a US Dollar recovery against the Euro and other key counterparts, leaving scope for a short-term correction in the context of a broader Greenback recovery. Indeed, CFTC Commitment of Traders data shows Non-Commercials hold a record notional net-short position in the Euro against the US Dollar, leaving relatively little room for further selling.
Forex futures and options markets have aggressively bet on a US Dollar recovery against the Euro and other key counterparts, leaving scope for a short-term correction in the context of a broader Greenback recovery. Indeed, CFTC Commitment of Traders data shows Non-Commercials hold a record notional net-short position in the Euro against the US Dollar, leaving relatively little room for further selling. The speed of the Dollar recovery tells us that this is the turn we have long been waiting for, but many signs point to short-term consolidation or pullbacks before the USD can continue higher.
Read a how-to guide on understanding our Forex Options Weekly Forecast report or view a video on the same. Discuss outlook for individual currency pairs in our forex forums.
Euro / US Dollar Options Analysis
Forex futures and options traders remain extremely long the US Dollar against the Euro, and we see scope for further short-term USD losses within the scope of a broader rally. Indeed, last week we wrote that the EURUSD was likely to bounce from its recent lows or at the very least slow its descent. A pickup in Forex options risk reversals suggests that EUR bears have taken their foot off of the accelerator, and we are likely to see further short-term consolidation. A drop in overall volatility expectations supports this thesis and we may see the EURUSD drift higher through the short term.
Read more... DailyFX - US Dollar to Decline on Extreme Forex Positioning
Forex futures and options markets have aggressively bet on a US Dollar recovery against the Euro and other key counterparts, leaving scope for a short-term correction in the context of a broader Greenback recovery. Indeed, CFTC Commitment of Traders data shows Non-Commercials hold a record notional net-short position in the Euro against the US Dollar, leaving relatively little room for further selling. The speed of the Dollar recovery tells us that this is the turn we have long been waiting for, but many signs point to short-term consolidation or pullbacks before the USD can continue higher.
Read a how-to guide on understanding our Forex Options Weekly Forecast report or view a video on the same. Discuss outlook for individual currency pairs in our forex forums.
Euro / US Dollar Options Analysis
Forex futures and options traders remain extremely long the US Dollar against the Euro, and we see scope for further short-term USD losses within the scope of a broader rally. Indeed, last week we wrote that the EURUSD was likely to bounce from its recent lows or at the very least slow its descent. A pickup in Forex options risk reversals suggests that EUR bears have taken their foot off of the accelerator, and we are likely to see further short-term consolidation. A drop in overall volatility expectations supports this thesis and we may see the EURUSD drift higher through the short term.
Read more... DailyFX - US Dollar to Decline on Extreme Forex Positioning
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