FXStreet (Delhi) – Kristoffer Kjær Lomholt, Analyst at Danske Bank, notes that according to the latest IMM data covering the week from 24 November to 1 December 2015, revealed that it was the sixth consecutive week of bearish EUR/USD builds. Key Quotes “While the change in last week’s non-commercial EUR positioning was only minor compared with the previous weeks’ bearish builds, it still highlights the significant expectation build-up in FX markets of Draghi delivering at Thursday’s ECB meeting. As we now know, this was not the case. As a result, the bounce in EUR/USD was unsurprising given the historically stretched level in positioning.” “While last week’s report has non-commercial EUR positioning at the 6th percentile, we suspect that short covering since the ECB’s meeting has sent this level significantly higher. However, focus will now turn to the Fed and with a great deal of short bets covered, we believe it will open up for some modest EUR/USD short-term downside potential this week.” “While the FOMC ‘dots’ may be revised in a more dovish direction in December, we still project a more aggressive Fed in 2016 than is currently priced in. We see EUR/USD under pressure from this side in 1-3M. A rebound in EUR/USD in 6-12M is still on our agenda though, as the end of ECB easing and the cross being stretched on fundamentals support the cross. Thus, we maintain our 12M EUR/USD forecast of 1.16.” “Otherwise, the most noteworthy change in last week’s report was the short covering in AUD, sparked by the very balanced Reserve Bank of Australia’s monetary policy statement, as some market participants had speculated on a more dovish tone in referencing the recent appreciation of the AUD. Non-commercial AUD positioning, however, remains stretched very short at the 8th percentile.” “We note that investors are at – or close to – historically stretched short levels in most commodities. Last week was characterised by a significant bearish wheat build and some short covering in oil.” For more information, read our latest forex news.