I still think this pair is likely to be one of the big movers and all it needs is one ‘shock’ to drive the bulls out of town.
- The big prime brokers have been reporting that real money longs have exited to a large degree leaving increased speculative longs, which were already at quite extreme levels;
- Moves in the US Treasury market suggests that they have given up completely on any ‘Taper’ in the foreseeable future;
- Some of the crosses like EUR/CAD are looking technically bearish.
It’s quite possible that we see some extended 1.0750/1.1000 consolidation but I think there is a big move lower coming. Timing, as always, is everything.