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Sustained EUR Rally Since Early July Trend Reversal

EURO-DOLLAR TECHS
  • On July 9, we highlighted the technical conditions present for a EUR
    rally (See MNI MARKETS ANALYSIS - Stars Align for EUR Bulls).
  • Moving average structures remains in a clear bull mode condition.
  • Price action also trades above the relevant trendline support.
  • Note, at current price levels, the trend is in overbought territory.
  • Trends will correct. It would not be a surprise to see part or all of the
    territory between 1.1780 and 1.1240 filled if a correction unfolds.
  • The P&F scenario is a 3-month rolling outlook. The outlook for Q3
    remains bullish. Any setback in price will be considered a correction.
  • Since the beginning of July, the EUR net long has built further, leaving
    markets positioned the most positively since mid-2018. Reflecting
    this, EUR 3m risk reversals are at their highest in five months and well
    above the 12m rolling average. This may suggest markets continue
    to anticipate the EUR rally extending into Q4 and beyond.
  • Full update here: https://emedia.marketnews.com/marketnewsintl/ED.png
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com

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