Societe Generale Cross Asset Strategy Research discusses the relation between EUR long positioning and the risk sentiment across the FX market.
"The “europhoria” that built over the summer was reflected in the build-up of large EUR longs on the CFTC data, and we will need to wash those out before the correction ends. We still expect this to be gradual and Tech still cites 1.1480 as a realistic downside target.
Meanwhile, the euro correction seems to be important in terms of FX risk sentiment (appetite for higher-yielding currencies in general). We might need to flush out euro longs to unlock a more ‘risk-on’ mood across FX," SocGen argues.
Source: Societe Generale Cross Asset ResearchOriginal Article
