Overall EUR positioning not extreme as beginning of the year

The weekly IMM series shows that overall EUR positioning is by no means as extremely bearish as it was earlier in the year. Two weeks after the ECB launched its bond purchase programme in March, net EUR short positions peaked at 226,560. 

The current level of 105,934 is roughly half of that, so there is further wood to chop for speculative investors wishing to add tactically bearish EUR or bullish USD views.

"Unless the ECB signals a deposit rate cut in the run-up to the 3 December meeting, or markets take the view that the deposit rate could be cut by more than the consensus call of 10bp, selling pressure in EUR/USD is more likely to be directed by the USD leg and expectations of a first rate increase by the Fed before year-end", says Societe Generale. 

Similarly, disappointing US incoming (employment) data should not bring much respite for the EUR/USD in the short-term with the 22 October close (ECB) of 1.1137 providing key resistance.