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Investing.com -- EUR/USD longs narrowly avoided a larger capitulation through Wednesday last week, as only traders with aggressive stop-loss triggers began unwinding their stretched positions. According to model estimates, the majority of CTA traders likely maintained their long positions despite recent pressure on the euro.
Friday’s rally in the euro provided some breathing room for these positions. However, if the currency were to decline further, a more substantial capitulation could occur in the 1.1384 to 1.1237 range.
In other foreign exchange markets, USD/MXN short positions remain significantly stretched and could experience larger unwinding if prices move higher.
Fixed income positioning shows 10-year U.S. Treasury futures at neutral levels, while 30-year futures are short. European Bunds and Korean Treasury bonds are also in short territory. Meanwhile, positioning in China’s 10-year bonds appears mixed according to the analysis.
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