ECB President Mario Draghi in his last Friday's comments hinted rejection of a rate cut / QE extension in December which would likely have a positive signal for EUR.
With a Fed that will hike key rates in December after all (according to the general view).
We see delta risk reversal for 1 week contracts have shown slight recovery signals but long term (1M-1Y) put contracts of EURUSD are on higher demand.
The BoJ will not extend its QE programme despite the fact that it continues to miss its targets.
The weekly increase of 43,368 net EUR short positions against the USD from -62,566 to -105,934 contracts is the highest since April 2008 (see chart below) and corresponds to a three standard deviation (sigma) move.
A glance at the data series shows these seismic shifts in investor sentiment are extremely rare, but it underscores how aggressively investors responded to the dovish ECB press conference two weeks ago and the serious consideration that has been given to the possibility of another cut in the deposit rate (-0.20%) and an expansion of the existing €60bn/month asset purchase programme at the next meeting in December.
Trade tips:
Draghi's dovish stance prompts us to increase euro shorts; initiate EUR shorts vs. CHF in G10 and vs. RUB and PLN in EM.
The portfolio was already short EUR/SEK via a 2m seagull pre-ECB. Long a 2-month 9.30-9.15 EUR/SEK put spread and short a 2-month 9.70 EUR/SEK call.


FxWirePro: GBP/AUD edged higher, set to stay on back foot
FxWirePro- Major Pair levels and bias summary
FxWirePro: AUD/USD soften slightly but trend is still bullish
GBPJPY Technical Check: Is the Dragon Running Out of Fire?
FxWirePro- Woodies pivot (Major)
FxWirePro: GBP/USD rises as UK political uncertainty fails to dent pound strength
Ethereum Technical Outlook: ETH Braces for Support as Bulls Eye the USD 2,200 Buy Zone
FxWirePro: USD/ZAR slips as rand gains on weaker dollar
FxWirePro- Major Pair levels and bias summary
FxWirePro: NZD/USD loses momentum but bullish setup remains
FxWirePro- Major Crypto levels and bias summary
Trump’s Hardline Stance Rattles Markets: BTC/USD Faces Volatility but Technicals Signal Strength
FxWirePro- Major Crypto levels and bias summary
NZDJPY Technical Outlook: Selling the Rallies as Bearish Momentum Consolidates
AUDJPY Relief Rally: A Golden Opportunity for the Bears?




