Dean Popplewell, currency analyst at global Forex trading platform OANDA, examines how currency traders are positioning as the eurozone crisis intensifies.
From a positional point of view, this market is record short the euro (EUR). Most individual models are starting to indicate that the currency is ‘undervalued' from a fair value standpoint. This one directional trade has witnessed a slow five-cent grind lower over the past ten-trading sessions, with very little profit-taking being booked. In the absence of major data until Friday's NFP and Euro PMI's, there is the potential that the currency, for positional reasons, could gather some momentum. Currently, the market does not believe in a short squeeze, but this is a major faux pas. The...
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