The Euro suffered the most, underperforming in FX weighed by Germany’s constitutional ruling which criticised the European Central Bank in its long-standing bond-buying program. The ruling does not affect the separate EUR 750 billion PEPP (Pandemic Emergency Purchase Program) launched in March to combat the coronavirus crisis. EUR/USD slumped 0.61% to 1.0837 in late New York after hitting an overnight low at 1.08259.
The other factor weighing on the Euro is the current level of speculative market positioning. We reported yesterday that speculative long Euro bets totalled +EUR 79,681 contracts from +EUR 87,218 the previous week. The latest Commitment of Traders report was for the week ended April 28. While this was an actual reduction of Euro longs, the net total is still near 2018 highs.
EUR/USD has strong support at its pivot point between 1.0790 and 1.0800. Immediate support for today lies at 1.0820. Immediate resistance can be found at 1.0880 followed by 1.0910. The Euro remains heavy and only a big move lower for the US Dollar can lift the shared currency. Which in today’s market, is very possible. Am neutral at current levels and look to trade a likely range today of 1.0820-1.0930.
