Citi trade of the week. Sell EURUSD.

Says positioning may play a key role in driving FX markets

Citi is out with their trade of the week. It is to sell EURUSD at 1.1157 with a target of 1.0975 and a stop loss at 1.1240.

Their reasoning:

"As investors position defensively in illiquid markets, the tendency may be to reduce exposures. EURUSD looks vulnerable on the downside to this phenomenon, with EUR buying in recent weeks across sectors having intensified. According to our flow analysis, the intensity of EUR buying in both the leveraged and the real money sector now stands close to one year highs and risks tapering off in reversing."

The EURUSD has moved marginally higher from their entry point (trades at 1.1187). Technically we need move value below the 1.1186 level (see prior post).

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