FXstreet.com (Barcelona) – The euro is trading in the 1.2320 region as of writing, recovering ground after last week’s lows around 1.2250 after the ECB has cut the refi rate to 0.75%. EUR bears seem to be taking a breather on Tuesday, although the bloc currency still remains under pressure.
According to C.Tuxen, Senior Analyst at Danske Bank, “…while EUR short positioning remained close to a record, the single currency did see some short covering last week ahead of the ECB meeting and the US non-farm report…”
The expert also comments that the pronounced decline after the ECB decision could well have prompted traders to add more ‘shorts’, rising risks of deeper setbacks. “…As a result, from a pure positioning point of view, further EUR downside should be limited…”.