BofAML Closes EURUSD Short, Fears Squeeze Higher

It is "Mission Accomplished" for BofAML's Macneil Curry's EURUSD short. Thanks to Draghi's moar-negative-rate-cut, EURUSUD pushed through Cury's objective and we note has now stabilized at 14-month lows around 1.30 the figure. Curry's fear now, given the extremes in sentiment and positioning, is that EURUSD squeezes notably higher.
*) Via BofAML; Closing our €/$ short position. We are closing out our €/$ short position, as the pair has reached our downside objective of 1.3104. On Jul-08, we recommended going short €/$ at 1.3594, targeting 1.3104. This target has been hit and we therefore close out the position...

Now, momentum and sentiment have reached bearish extremes which have often preceded a turn higher. Specifically, daily RSI has reached its lowest levels since 2Q12, while the DSI (Daily Sentiment Index) has reached 6% bulls, the lowest since July'13 (see chart on page 2). These conditions make the potential for a technical squeeze/correction higher too large to ignore. However, we must stress that a €/$ bounce must be seen as corrective/ temporary and ultimately an opportunity to re-set shorts for 1.2787/1.2694 and potentially below to the 1.22/1.18 area...