EUR/USD Heads Into Multi-Month PoC Amid Diverging Valuations

EUR/USD is fast approaching a critical POC (Point of Control) area, which comprises the highest accumulation of volume through June-July, while a clear divergence continues to play in the risk-weighted index and short-dated yield spreads (2yr German vs US). Additionally, market participants must be reminded that the breakout of the range in early August was achieved amid higher volumes and open interest, as unpacked in our CoT analysis section (see blog address below). It suggests that the level may prove a very difficult ara to overcome in the near term and provides the point of maximum risk-reward for macro sellers as if surpassed would start to negate the overall bearish trend structure in the daily chart.