The markets' reaction to the latest Fed words advise that the dollar weakness against close G10 FX seen since slow May was a seat unwind, rather than a harbinger of things to come, says Deutsche Bank.
"Indeed, the dollar has rallied against all G10 currencies since the FOMC meeting, together with inwards close cases the size of the rally has been proportionate to the size of dollar weakness seen before. European currencies should thus offset to weaken against the dollar," DB adds.
Morover, DB notices some other bearish constituent for EUR/USD is that its Euro-area information surprises index appears to move running about its recent years’ highs, piece the States information surprises are solely immediately starting to plough
On exceed of that, DB's positioning measures suggested that long euro positions ahead of FOMC reached their highest levels since 2009.
"Therefore, much of the relative skillful tidings on the euro appears priced, together with and so the euro should at the rattling to the lowest degree caput to the low-end of this year’s hit of 1.28 inwards the coming months," DB projects.
As such, DB advises its clients to rest center curt EUR/USD equally long equally nosotros check below the recent highs, together with to add together to shorts on a bounce upward to 1.3265/70 area. S/T, DB sees the duad targeting the 1.3070-90 expanse where the 55, 100 together with 200 dma all lie.
Read More: http://www.efxnews.com/story/19384/keep-faith-stay-core-short-eurusd-add-bounces-deutsche-bank