Better End to a Poor Week, Euro Shorts Building up

The euro carved out a fresh two-year low then snapped back on Friday, jumping nearly a cent. The pound sterling was even stronger, gaining 1.5 cents while the US dollar slumped. Weekly CFTC positioning data showed increasing euro shorts. Fridays GBPUSD long hit all targets. Silver, gold and oil were added to Thursdays Premium Insights. See more below.

EUR/USD fell as low as 1.2161 early in US trading on talk of negative ECB deposit rates. The euro then abruptly shot to 1.2258. Rumors of an large Australia trade followed the move and talk of options-related buying and a short squeeze added to the mystique but there was no clear catalyst for the move.

The bounce blossomed into a broad risk rebound with the US dollar falling across the board. The S&P 500 climbed 1.7% to wipe out the weekly loss.

Economic data was downcast as the University of Michigan consumer sentiment survey fell to a 7-month low of 72.0 compared to the 73.4 expected.

Fed policymakers continue to lean dovishly. Lockhart said current calibration of policy is untenable unless the economy reverses its recent slide. He said most members of the committee are concerned about slowing growth.

The Commitments of Traders report increased euro shorts but overall position remains some distance from the -214K spring low. Other data in the CFTC report:

EUR net short increases to 165K from 146K

JPY net longs increase to 9K from 4K

GBP net shorts increase to 8K from 5K

CAD net longs decrease to 4K from 9K

AUD net longs increase to 19K from 9K

NZD net longs increase to 5.5K from 4K

Fridays GBPUSD long hit all targets. Silver, gold and oil were added to Thursdays Premium Insights For DIRECT ACCESS to these Premium Insights, click here: http://ashraflaidi.com/products/sub01/access/?a=665 Non Subscribers can please click here: http://ashraflaidi.com/products/sub01/

-AB