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Forex Flash: EUR & GBP look bearish ahead - OCBC Bank

Emmanuel Ng of OCBC Bank is bearish on EUR/USD and GBP/USD after CTFT data reflects net short biases ahead.

Starting with EUR/USD he notes that he is staying negative on the pairs prospects as he kicks off the week with a key Fibo retracement level now acting as immediate resistance. He writes, “Apart from the psychological 1.30 and 1.29 floor, the next pivotal area is expected towards the 200 day MA (1.2846). He writes, “Meanwhile, note that net CFTC speculative EUR positioning flipped to a net short balance in the latest week.”

Shifting to GBP/USD he adds that the pair was pummeled on Friday following the surprise contraction of the manufacturing PMI and the growing malaise from recent data points continues to breed market expectations for further QE. He writes, “In the latest week, net CFTC speculative GBP shorts were further accumulated and we expect GBP/USD to seriously consider taking a trip below 1.5000 on a sustained basis this week if the BOE/macro new flow continues to remain dovish.”

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