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CITI cb wklytech 21 11 14.pdf


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Market Commentary │ November 20, 2014
EURUSD - October 2014

Source: Aspen graphics/Bloomberg November 19, 2014.



In 2014 the “carnage” was quicker and less deep than that seen across markets in August-October 1998.As
we saw major moves in the Equity market, volatility, fixed income and commodities EURUSD squeezed up a
paltry 3% over a few weeks with a big portion of that move taking place on one day (15 October)



This was a much less aggressive move than that seen in 1998 and also much less in magnitude than seen in
other markets.



To us that suggests that in reality the short EURUSD position was much less “owned” than people thought. It
seems that sentiment was much more extreme than positioning. Since then we have moved to new lows in the
trend at 1.2358.



We continue to hold the view that a move to the 200 month moving average before year end (possibly even
next week) is a possibility.

EURUSD-Monthly chart

Source: Aspen graphics/Bloomberg November 19, 2014.



The 200 month moving average has held all major corrections lower in EURUSD since 2005. While we do
expect it to ultimately give way this time, we suspect that will be a 2015 story.



For now we think there is the potential for one more low on EURUSD this year close to that average (1.2223)
before a pause and resumption of the trade in 2015, as we saw in 1998-1999.

Market Commentary – for Institutional Client Use
Only. Refer to informational disclosures and
qualifications at the end of this publication.

Weekly Roundup
November 20, 2014

2