Euro (EUR) shorts continued to face the squeeze as USD, UST yield eased. Pair was last at 1.0546 levels, OCBC’s FX analysts Frances Cheung and Christopher Wong note.

Possible EUR short squeeze near term

“Daily momentum shows signs of turning bullish RSI rose. Bullish divergence is observed on daily MACD is playing out. We continue to caution for EUR short squeeze in the near term.”

“Resistance at 1.0580, 1.0640 (21 DMA). Key support at 1.0490, 1.0450 levels before 1.03. Focus this week on Euro-area CPI (Fri). Upside surprise may aid the squeeze in EUR shorts.”