EUR/USD: bears back in control judging by positive IMM positioning? - Scotiabank

Analysts at Scotiabank gave the loaddown for EUR/USD traders.

Key Quotes:

"Eurozone services and composite PMI data were finalized a little below preliminary estimates for August (France and Italy services data were weaker). Retail sales fell 0.3% in the Jul month, as expected. 

EURUSD remains well-supported but last week’s 1.20+ high remains something of a hurdle for markets considering that net positioning remains quite aggressively long (based on IMM data) and that seasonal trends may start to turn a little more adverse for the EUR in the next few weeks. 

Recall also that, ahead of Thursday’s ECB meeting, messaging from the central bank has suggested some discomfort with the EUR’s recent strength and the possibility that policy makers will not be ready to reduce asset purchases until Dec. 

Neutral/bullish: EURUSD is holding in a tight range around 1.19—something which may persist in the short run.

Trend momentum signals are positive but longer run price action suggests some risk that last week’s high may represent a high water mark for the markets for now. We see evidence of strong net selling interest in the upper 1.19s now. Shortterm trend support is 1.1865."