ECB President Mario Draghi in his last Friday's comments hinted rejection of a rate cut / QE extension in December which would likely have a positive signal for EUR.
With a Fed that will hike key rates in December after all (according to the general view).
We see delta risk reversal for 1 week contracts have shown slight recovery signals but long term (1M-1Y) put contracts of EURUSD are on higher demand.
The BoJ will not extend its QE programme despite the fact that it continues to miss its targets.
The weekly increase of 43,368 net EUR short positions against the USD from -62,566 to -105,934 contracts is the highest since April 2008 (see chart below) and corresponds to a three standard deviation (sigma) move.
A glance at the data series shows these seismic shifts in investor sentiment are extremely rare, but it underscores how aggressively investors responded to the dovish ECB press conference two weeks ago and the serious consideration that has been given to the possibility of another cut in the deposit rate (-0.20%) and an expansion of the existing €60bn/month asset purchase programme at the next meeting in December.
Trade tips:
Draghi's dovish stance prompts us to increase euro shorts; initiate EUR shorts vs. CHF in G10 and vs. RUB and PLN in EM.
The portfolio was already short EUR/SEK via a 2m seagull pre-ECB. Long a 2-month 9.30-9.15 EUR/SEK put spread and short a 2-month 9.70 EUR/SEK call.


FxWirePro: GBP/NZD sustains gains as uptrend remains strong
FxWirePro: GBP/AUD struggle to extend its recovery, good to sell on rally
Fade the Rally: EUR/JPY Short Opportunity Near 180.80
Sell the Rally: Gold Eyeing $4,000 as Dollar Strength Takes Control
FxWirePro: USD/JPY loses momentum but outlook is bullish
FxWirePro- Woodies Pivot(Majors)
FxWirePro: GBP/AUD firms slightly, but downward resumption looks likely
FxWirePro- Major Pair levels and bias summary
FxWirePro- Major Pair levels and bias summary
Extremely Bearish JPY Majors: GBPJPY, NZDJPY, AUDJPY Lead the Decline
FxWirePro: AUD/USD pressured by rising treasury yields, risk-off mood
GBP/JPY Pullback Deepens: Sell-on-Rallies Strategy Targets 207.00 Support
FxWirePro: EUR/AUD retreat from early gains, eyes another drop
FxWirePro- Major Crypto levels and bias summary
ETHUSD Surges Past $2700 on Strong Institutional Demand, Technicals Show Bullish Crossover Despite Cooling ETF Inflow Momentum
FxWirePro: USD/CAD hits two month high as Canadian as retail sales post monthly decline




