Short EUR/USD (29-30 May)
This trade was stopped out within the same day.
Real-Time AmpGFX – sold EUR/USD (Tue 5/29/2018 1:06 PM MT)
Sold half unit of EUR/USD at 1.1527
Comment
As discussed in my AmpGFX report today, it appears hard to walk back from the path taken by Italian leaders, so risk aversion likely to remain elevated.
We see a risk of a pocket of low liquidity opening up under the EUR. Possibly on a break of 1.15. I have put in a t/p that looks unrealistic but might benefit from a flash crash. GBP-style in in October 2016.
This might occur on a capitulation in longs (CFTC data still long), and lack of buyers, even momentarily, algo trading and banks that no longer make markets or take risk.
Positions
Short half unit AUD/USD at 0.7525, s/l 0.7588
Short half unit of EUR/USD at 1.1527; s/l 1.1613; t/p 1.075
We have highlighted the rate differential 1year-1year forward as something that had appeared to be correlated with EUR. This has fallen sharply. (chart)
Risks metrics in the Eurozone are severe.
Its banks have been hard hit. (chart)
Corporate IG CDS in Euro has jumped above the US. (chart)
Italian 2 yr yields have jumped to a high since the heart of the Euorozone crisis. (chart)
While short-term positioning indicators suggest that the market may now be short EUR/USD. The CFTC CME futures positioning report shows that non-commercial traders are still heavily long EUR. (chart)