Forum - EUR (Topic)

Singapore, Singapore

Posts: 52

14 years ago

Jun 20, 2010 0:59

COT Weekly Data Discloses Biggest Euro Short Covering Episode In History

The CFTC Commitment of Traders is out and, it's a doozy: the amount of short covering in net spec EUR short positions hits what is certainly an all time record, as just under 50 thousand (49,585) short contracts are covered. This represents a huge 44% of all outstanding EUR net shorts (-111,945) as of the prior week. No wonder the EUR surged, and no wonder Goldman downgraded the EURUSD - in tried and true fashion we wonder how many banks tightened up margin requirements only to force the biggest short squeeze in history. It is only logical that every sellside desk would try to sucker as many clients as they could in advance of this rampage. The current net spec short position takes total shorts back to levels from mid-April, when the euro was trading in the 1.30 range. This is very bad news for existing EUR longs as it is now guaranteed that all weak hands have certainly been shaken out. Any additional move higher will actually have to occur for truly fundamental reasons. Alas, those will not be coming any time soon.

montmorency

UK

Posted Anonymously

14 years ago

Jun 20, 2010 0:44

@Catnip: "By "extreme positions", you mean very large ones?

Also, would you mind explaining your reasoning for those specific price levels in EUR/USD?
Thanks.

Well, The Guardian is writing again about "Mutti" Merkel's troubles:
http://www.guardian.co.uk/world/2010/jun/18/germany-ruling-alliance-angela-merkel
http://www.guardian.co.uk/business/2010/jun/18/european-union-germany-france

(It probably just helps to take our mind off our own problems .... not least those on the football field!

catnip

Frankfurt, Germany

Posted Anonymously

14 years ago

Jun 19, 2010 12:33

A large percentage of euro gain is due to short covering of extreme positions . Now however
the next short covering needs eur to climb close to 1,25 I think in the coming days the probabilty of going down to 1,22 is higher than a continued recovery. But eventually we'll see 1.27 before eurusd falls sharply to 1,16 .
One has to consider, too, that net selling of USD assets mainly by BRIC Cbs put some pressur on USDx and provided some upward to gold.
However especially Medvedev's comments renewed on ruble as world reserve curreny and Moscow as financial hub don't appear as clever. The Kremlin's stance and interventions to the benefit of a handful of Mafia oligarchs in the TNK BP case was another warning one cannot trust them. Which serious investor would go into biz with Vekselberg or Deripaska when they know the kremlin backs them under all circumstances?

Merchant

Posted Anonymously

14 years ago

Jun 19, 2010 6:04

Hi all,

It seems on the hourly chart that EurUsd is forming a flag formation, i.e. that there is a potential break to the upside. Any comments ?

ozzy

brampton, Canada

Posts: 14

14 years ago

Jun 18, 2010 12:25

catnip...

Thanks for the insight....I guess I will think twice next time.

If there's any good trades in the near future I would love to hear about them,to recover so losses....

djellal

LAUSANNE, Switzerland

Posts: 531

14 years ago

Jun 18, 2010 9:45

CAT,
Vladimir Putin said same things last week in french interview

ross

Hawaii, United States

Posts: 37

14 years ago

Jun 18, 2010 9:44

Interesting tweet:
piptopia Why I think the EUR/CHF is going to rise 1,000 pips (really):http://robbooker.com/free/EURCHF_Report_June172010.pdf

catnip

Frankfurt, Germany

Posted Anonymously

14 years ago

Jun 18, 2010 9:39

Medvedev did not ruleout both collapse of the euro and Russian support for euro in an interview with the Wall Street Journal that was provided by the Russian government
It is hard to tell what kind of support for Euro ? Buying Euro by Russian CB is not even mid term supportive the EU needs money, that is USD, not rubles...a fat cash injection

Frog

France

Posted Anonymously

14 years ago

Jun 18, 2010 8:26

Oil is up - in excess of 77$ yesterday - maybe smart money is selling dollar and buying oil. As long as the BP story is not ended, everybody fears a complete ban of offshore drilling which would put a pressure in oil price. Jim Rogers, who's been short euro early , is now long euro and long oil (with target above 100$).

So maybe it's not only a risk appetite but rather a dollar weakness related to oil (but remember what happened to oil and dollar after the Olympic games in 2008)

I'm waiting for the end of the World Cup and expect the downtrend to resume. Too much people being busy to watch TV and excited about football-soccer. Let this frenzy fade mid July.

Stationdealer

London, UK

Posts: 715

14 years ago

Jun 18, 2010 7:50

Im back and market still consolidating in gain but 1.2430 plays here as a resistance, Time and space been still plays for now only thing that plays against that is that Euro keeps making daily highs. Euro held up with some good gains. As i said earlier this week till the US China Yuan issue remains unresolved and heated we will continue to see Euro strength as Dollar status vs the Chinese diplomacy remains uncertain. Market purely liking the recovery seen in euro as risk averse market took the opportunity to gain a little strength for themselves, European markets have done fairly better. Traders sentiment seems to be up .

The U.S. Dollar traded down against all major currencies, driven lower by increased demand for higher risk assets. Risk appetite was strong this morning following the news that last nights Spanish Bond auction overnight was oversubscribed, easing tensions about renewed sovereign debt issues in the Euro Zone.

Thursday mornings good news erased worries that the Dollar was preparing to strengthen after several consecutive weak days. The U.S. Dollar edged slightly higher against most major currencies on Wednesday as investors pared positions in higher risk currencies on economic worries and Spain concerns. Now that tensions have eased about Spain, traders turned their focus on Thursdays slate of U.S. economic reports.

After the early morning rally, triggered by the Spanish bond story, the Euro surged to the upside after a series of disappointing U.S. economic reports. This move surprised traders since recent poor economic reports had triggered a flight to safety rally into the Dollar. Thursdays move helped scare weak shorts out of the market, thereby extending the early rally.

Technically, the Euro closed in a solid position and seems to be poised to breakout over the last main top at 1.2453. This move will turn the main trend up for the first time since early April. Following a change in trend to up, look for the rally to continue to the next main top at 1.2671, but the ultimate target remains a major 50% price level at 1.2784.