Morgan Stanley: short on EUR/USD

Strategists at Morgan Stanley hold a short position on EUR/USD from 1.2750 with a take profit at 1.2000 and stop loss at 1.2600.

In their view, positioning in EUR/USD is gradually moving towards neutral, suggesting more room to increase EUR shorts. Secondly, they see EUR becoming a funding currency. The ongoing global and domestic deflationary pressures should keep the European central bank dovish, weighing on EUR.

Analysts see the only risk for their trade – weak US data releases. 

Chart. Weekly EUR/USD


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