TD Research argues that apart from the fundamentals, extreme positioning will push pressure points in G10FX.
In that regard, TD notes that based on the net specs/open interest over a 12-month range, EUR and AUD look the most overbought while CAD looks the most
On the EUR, TD notes that it’s running ahead of cyclical drivers, and expects more downside into 1.08.
On the AUD, TD sees less room for AUD downside in the short-term, on the back of a mix of techs and valuation.
On the CAD, TD notes that the recent shift in price action has led to some deterioration in the cyclical picture, with USD/CAD settling into a mini trading range of 1.35 to 1.38 near-term.
EUR/USD is trading circa 1.0870 and USD/JPY is trading circa 114.17, and USD/CAD is trading at 1.3720 as of writing.
Source: TD Securities Research
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