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EUR/USD staged an impressive recovery from the lows. But can it continue forward? Here are some doubts.

Here is their view, courtesy of eFXdata:

BTMU Research discusses EUR/USD outlook from the risk-premium perspective which has been building in the price as of late on the back of the political developments in Italy.

“The ECB QE announcement created around 7-8 big figures of risk premium into EUR/USD while Brexit prompted roughly six big figures and the French presidential election 5 big figures.

We estimate around 3 big figures of risk is now priced in,  which based on past examples could certainly increase further. Our short-term regression models indicate a similar story while the IMM data on leverage short euro positions as a percentage of open interest remains remarkably low –  there is certainly scope for this EUR move to extend further lower,” BTMU argues.

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