EUR/USD trades at session highs in the 1.2270s, boosted by heavy demand from real money accounts as well as from central banks.
One theme seems to be emerging in the last several sessions: Time to get back to neutral.
Asset managers have been underweight Eurozone assets and the currency and with signs of stabilization in recent sessions, they are scrambling to get back to benchmarks.
Same story for central banks, it would seem. They have not been diversifying into EUR as aggressively as previously in recent months. Now that volatility is dying down, they are getting back to business as usual.
With the market still overwhelmingly short, that “return to normalcy” is enough to give EUR/USD a boost.
Middle Eastern accounts were particularly aggressive EUR/USD buyers earlier, with rising oil prices an added kicker…
1.2300 barriers are rumored being defended on strength. Stops lie at 1.2310 and 1.2330, traders say.