EURUSD congested positions revealed by CoT report. According to the most recent CoT data, the euro-long setup gets congested.

EURUSD supported by German Central Bank

German inflation is in line with expectations, and central bank chitchat is back.

German inflation was issued today in line with forecasts, causing a rise in EURUSD that has now slightly reversed.  Kazimir, Nagel, Schnabel, and dove Stournaras of the (ECB) have all joined the debate during the past several days. People on the more aggressive end of the spectrum, including Nagel and Schnabel, have said that further work must be done to reduce inflation. And that rate cuts seem doubtful in the near future, as such things tend to go. Stournaras, an ECB dove, opted to concentrate on an alternate pitch that rate increases will stop in 2023. Markets nonetheless pay attention to what relevant policymakers have to say.

Technical levels of significance for the EURUSD

Around the 1.1075 mark, the positive momentum appeared to be slowing downwards, and as the ECB-instigated downturn continued. EURUSD blew off a little steam. The ECB chose to raise rates last Thursday in accordance with expectations (25 bps), but was already factored in. Triggering a profit at rather high levels for the duo.

Since then, the decline has gone through the initial area of support around 1.0965. Signaling a further retracement in the direction of 1,0910. The chance of a bullish extension (close beyond 1.0965). Or a more serious downturn (close beneath 1.0965) may be determined by looking at the daily close for today. Resistance stands at 1.1075, while support comes at 1.0910.

Another point to pay attention to is the ATR indicator’s noticeable drop in volatility. Which has been trending down since the banking turbulence in March. A second shot at retesting the annual high is now possible as the RSI has moved approaching neutrality. The durability of the current bull tendency would be called into doubt by a collapse of 1.0910 with continuing momentum.

Euro helped by a large volume of long positions

The long EURUSD position being extremely full was another factor adding to the pullback’s velocity surrounding the ECB rate decision. The smart money group of exotic money managers’ long and short positions varies. Long positioning far surpasses short positioning, allowing the present retracement to take place. The euro/dollar bears discover the greater value for potential short trades as the market rises. However, unless there is a verified trend reversal, it is best to trade with the current trend.

CFTC – COT Data

Note:

The weekly Commitments of Traders (COT) report from the Commodity Futures Trading Commission (CFTC). Gives an overview of the total holdings held by “non-commercial” (speculative) investors in U.S. futures exchanges.

The positions taken by individuals, who are predominantly based in the Chicago and New York futures exchanges, are reflected in all data.