The Euro grinded higher on broad-based US Dollar selling, enabling the shared currency to climb to 1.13198 overnight highs before easing to settle at 1.123 in later New York trade. Early Sydney saw the Euro up at 1.1303. As equities continued to drive higher with Wall Street stocks climbing to near all-time highs, heightened risk appetite weighed further on the Greenback. The Euro’s gains from this point are the result of USD weakness.
The larger than expected fall in Germany’s Industrial Production to -17.9 % against expectations of -16.0 % followed Friday’s slump in German Factory Orders to -25.8% (against forecasts of -20.0%). This set of data was ignored by FX. Eurozone Sentix Investor Confidence Index also missed forecasts with a fall to -24.8 from -22.0. These fundamentals will soon weigh on the shared currency as the market’s increasingly bloated appetite for risk is due for a reversal and a US Dollar rally.
The latest COT/CFTC report saw net speculative Euro long bets increase to +EUR 81,240 in the week ended 2 June from the previous week’s +EUR 75,222. Which is a large build in Euro longs of +EUR 6.018 contracts. Net total speculative long Euro bets have hit 93% of the annual highs in long Euro positions. A turnaround lower is not far away.
EUR/USD has immediate resistance at 1.1325 followed by 1.1350 and 1.1380. Immediate support can be found at 1.1280 followed by 1.1250. Look to sell rallies in a likely 1.1240-1.1340 range today.