eFX with BoA/ML comments on EUR/USD
It looks much less controversial after the ECB disappointed last week
and the Euro squeezed higher. Although we remain bearish EUR/USD in the
long term and expect it to weaken to 0.95 by end-2016, our year-ahead
report saw upside risks in the short term. The short EUR position ahead
of the ECB meeting was not as stretched as it was last March, but it was
getting close. Indeed, the price action after Draghi fell far short
from market expectations reflected a painful positioning squeeze.