This is something we’re noticing that isn’t getting talked about
much. Why are so many speculators piling on to the long US Dollars
trade? And why is this breakout in the Euro happening so quietly? Last
week we saw the highest levels in
$EURUSD
since February. I bet if it was the other way around and Euro was
hitting 4-month lows we would certainly be hearing about it. But it’s
the US Dollar hitting fresh lows. And this is all while small
speculators have their largest net long positions in a decade.
Here is the US Dollar running into resistance last month up near last
year’s highs. We’re noticing similar characteristics in both dollars
and euro that we saw last summer (see
here and
here). As the dollar index made new highs in May, momentum was already rolling over and making lower highs:
And this is all coming while the commitment of traders report is
showing that speculators have big bullish expectations. Not a good
combination if you ask me. Let’s see what happens.
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