CFTC report: EUR/USD rebound is corrective
According to the most recent CFTC report for the week March 17-24, large speculators increased their net long USD positions. Cost of the net bullish USD positions rose by $5.3B to $43.9B. Meanwhile, net EUR shorts hit a fresh record high of 220K contracts.
How could this information be useful for traders? Let me remind you that on March 18 the US Fed meeting stopped the long-lasting US dollar rally. As a result, EUR/USD recovered above the 1.1000 mark, gaining more than 600 pips over this period.
However, we see that the EUR/USD recovery is not reflected in the large players’ positioning. They are not in a hurry to close their net short EUR positions. What’s more, they opened the new ones at a higher levels. It means that the current growth is corrective and will be followed by a new wave of selling.
As for the other currency pairs, net GBP shorts increased slightly, while GBP shorts declined a little, reaching their lowest levels since 2012. Net CHF positions failed to fix in a bullish zone: this week they returned to the negative territory. NZD, AUD and CAD stayed almost unchanged.