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EUR/USD: Only 3 Big Figures Of Risk-Premium Priced In; Scope For Lower Extension – BTMU

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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Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.