EUR/USD longs crowded, positioning starting to look elevated? - Scotiabank

Analysts at Scotiabank noted the overnight data from the EZ and the subsequent positioning outlook for EUR/USD.

Key Quotes:

"Eurozone CPI was finalized at 1.5% in the Aug year, unchanged from the preliminary report. Core price gains remain sluggish at 1.2%, however."

"IMM data Friday revealed a sizeable drop in net EUR longs, reflecting a rising in shorting activity following the EUR’s test (and rejection of) of the 1.20 area."

"Market positioning is not at an extreme but is starting to look elevated (net EUR longs at 93k contracts), suggesting some risk of a broader change in market tone if net longs reverse. Positioning warrants attention in the weeks ahead."