FOREX: EURUSD Seasonality May Impact Towards Year-End

• CHFUSD (5th Dec) 130.5c, sold at 0.02 in ~1k.

The Underlying December contract trades at 124.23.

UBS write “continuous positive price action in equities has been very profitable for CTAs in the last three months. Strong Q3 earnings are not derailing the trend, encouraging CTAs to stay put despite heavy positioning”.

• Based on their forecasting model they suggest that “only a 2std downturn scenario will spark some CTA selling, with 6,650 (S&P)/5,450 (SX5E)/9,250 (FTSE100)/46,700 (NIKKEI) acting as respective trigger points”.
• Those levels remain some distance away, despite the previously detailed pullback in equities (which has started to reverse). This suggests that CTA liquidation did not play a part in the equity weakness witnessed during Asia & early London trade.

CADUSD (5th Dec) 72.00c, sold at 0.08 in ~1.9k.