So what’s going on with the EUR/USD? What is the latest data concerning the commitment of traders?
The latest installment of the CFTC Positioning Report indicates that speculators have increased their net long positions on the single currency for the 2nd straight week. These actions take the net longs to levels last seen in March 2021.
This speculative shift comes on the back of an expected rebound of the Eurozone economy. New economic data show some improvement and a more concerted vaccination effort, which allows for better control of the pandemic and a return to economic activity.
In contrast, investors are shedding more speculative long positions on the US Dollar, as bond yields show signs of topping out and the Fed refuses to taper the QE program early. The general uptick in risk sentiment is also not favouring the safe-haven greenback.
Also supporting the Euro on the day is the latest proposal from the European Commission for member states to ease non-essential travel restrictions for vaccinated individuals. The lifting of the year-long ban is expected to lead to a gradual recovery of economic activity in the near term.
As of the time of writing, the EUR/USD was up 0.25%.
Technical Levels to Watch
In the medium-term, the speculative shifts in the Euro and US Dollar are expected to allow the EUR/USD to reclaim 2021’s highs at 1.23490. This move has to come on the back of bullish momentum that breaks past the initial resistance barrier at 1.20549, along with upside targets at 1.20890, 1.21487, 1.21792, and 1.22416 (25 February high).
On the other hand, a rejection at the 1.20549 resistance targets 1.20000 next, with 1.19472 and 1/18927 coming into the picture as downside targets. Any of these areas may experience some dip-buying from bargain-seeking bulls.