EUR: Positioning In The Driver’s Seat N-Term; What’s The

Euro/dollar holds its higher ground. As the second round of the French elections near, can it continue even higher?

Here is their view, courtesy of eFXnews:

TD FX Strategy Research argues that given the lack of FX major directional themes, positioning is likely to be closely watched near-term.  

In that regard, TD notes that market positioning looks the most stretched in EUR based on sentiment indicators on a 12-month look-back window.

“The EUR is closing in on the new highs for the year, which also dovetails with stretched valuation on our HFFV model (1.086).  The gap is not large, but it does suggest that the bar of a correction in the EUR is probably low,” TD adds.

Strategy-wise, TD sees scope for re-entering fresh short EUR/GBP exposure, after the recent relief rally in the wake of the French elections.

For EUR/USD, TD likes fading move ahead of 1.10 and near-term look for the 1.07 to 1.10 range to hold. 

EUR/USD is trading circa 1.09 as of writing.

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