Kit Juckes of Societe Generale, notes that the wiser path for EUR bears is to protect against a possible deal between Greece and its creditors.
“The twists and turns of the EUR/USD rate are far from over. Last week's CFTC positioning data showed a further fall in the EUR short on the IMM but not a huge fall, suggesting that only a part of the position has been cut in the correction.”
“RSIs have flipped from very overbought in EUR/USD two weeks ago to flirting with oversold positions already this morning. And the week has no helpful-looking data releases.”
“There's nothing out in the Euro area today and the economic data at the back end of the week (economic confidence, money supply) should be reasonably robust.”
“The US has mostly minor data until Friday (though a jump in new home sales today would be a tonic for the dollar) when a downward revision to Q1 GDP would make all the wrong kind of headlines.”
“Maybe the message is that if we are significantly lower in EUR/USD by the middle of the week, the wiser path is to protect against a deal being done to keep Greece afloat.”
“In the meantime, we like staying short EUR, GBP and CHF against NOK, SEK and PLN for the long term.”