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EUR/USD had a minor correction that may have already ended. Is it still overbought? Here are two opinions:

EUR: Buy Dips In EUR/USD & Play The Squeeze In EUR/JPY – TD

TD FX Strategy Research notes that its high-frequency fair-value  model shows that EUR is the most expensive currency in G10.

“It has been trading at a 1-simga premium since late June and has been pushing the 2-sigma level since the end of July.  Our preference is to buy into (if we ever get one) EURUSD dips, especially on a downside break towards 1.15,” TD advises.

For now,  TD is looking to short EUR/JPY  given the risks to a more pronounced squeeze in the majors.

For EURJPY, we look for a move lower towards the 125.8/126.10 pivot, which is an area that we think offers strong near-term support over the coming weeks,” TD projects.

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EUR: Extreme Positioning Hints At FX Volatility Rise; Better Buy Levels On Temp Pullbacks – CIBC

CIBC FX Strategy Research notes that despite picking up a little recently, volatility in the FX market remains fairly low bu that could change if speculative positions are pared.

“For many major currencies, such positions are at or near recent extremes (shorts for the yen and longs for the euro and loonie), and as such could see a covering of those positions if economic or market sentiment shifts.

Even though we’re fairly positive on the euro longer term,  a temporary pullback on long EUR  covering could provide some better levels to buy in the near term,” CIBC argues.