EUR/USD – The Euro outperformed FX as speculative shorts scrambled to cover their positions against the broad-based weaker US Dollar. The shared currency rocketed to an overnight and near 2-month high at 1.11847 before easing to settle at 1.1135 in early Sydney trade. Euro area Manufacturing PMI’s were mostly upbeat with Italy and Spain bettering forecasts. Manufacturing PMI’s France and Germany matched expectations.

The latest Commitment of Traders report saw net speculative Euro short bets increase to -EUR 114,021 bets (week ended February 25) from -EUR 91,507 the previous week. Net Euro shorts jumped to a 38-month high and the equivalent of USD 15.5 billion according to Saxo Bank.

Expect consolidation within a new trading range of 1.1080 to 1.1180 with the Euro continuing to drive higher. The short term up move has been swift and powerful. Immediate resistance on the day lies at 1.1160 (NY close) followed by 1.1185 (overnight high). Immediate support can be found at 1.1085 and 1.1050. Short-term, look to trade a likely range between 1.1085 and 1.1185. in the more medium-term, look to buy the shared currency on a move back down to 1.1050.