EUR/USD – Rebounds Off Lows, Spec Long Bet Build Will Limit Rallies

The Euro rebounded off its low traded 1.11682 over the weekend, ending a 4-day losing streak to finish at 1.1265 in late New York. EUR/USD rallied further in early Asian trade to 1.1281 before easing to settle at its current 1.1277. The shared currency benefited from the broad-based US Dollar fall and rise in risk appetite. The news of a possible fresh Spanish stimulus also lifted the Euro.

EURUSD Daily FX Chart - 23 JUNE 2020
EURUSD Daily FX Chart – 23 JUNE 2020

Market positioning in the Euro remains long at dangerous levels. According to Saxo Bank, the latest Commitment of Traders/CFTC report saw net speculative Euro long bets jump by +EUR 21,483 contracts to total +EUR 117,132 which are the biggest number of long contracts in the Euro since May 2018. Total long Euro contracts totalled +EUR 14.6 billion. Which is huge.

EUR/USD has immediate resistance today at 1.1300, 1.1330 and 1.1360. Immediate support lies at 1.1250, 1.1220 and 1.1180. Look for consolidation today into the global PMI data and any fresh news on Covid-19 with a likely range between 1.1240-1.1340. Prefer to sell into any rally.

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