Societe Generale FX Strategy Research notes that positioning is currently a challenge for further EUR/JPY gains.
"CFTFC data for last week showed the market increasing its long speculative position in EUR, and simultaneously increasing the short in JPY.
Put CFTC positioning together by subtracting the JPY position from the EUR one and we have a 'synthetic' EUR/JPY short of very significant size. This doesn't encourage hopes of a push up from EUR/JPY 130 without at least some time to ease the positioning," SocGen notes.
"Given the market's already dovish expectation about Fed policy through year-end, a push higher in euro crosses from current levels would principally require further tightening in European peripheral spreads," SocGen argues.
Source: Societe Generale Cross Asset ResearchOriginal Article
