EUR/USD's growing short position is ripe for a squeeze higher, but upside obstacles might prove difficult to crack.
In the week ending March 5, the futures market was short an equivalent EUR/USD cash position of $9.8 billion, up from $9.1 billion the previous week, IMM data showed.
EBS flow data since March 5 shows even more euro shorts may have been established, meaning associated buy stops are vulnerable to the latest EUR/USD recovery.
EUR/USD continued the rise from the last week's 1.1177, the 2019 low, to break the 1.1270 Fibonacci level, a 23.6 percent retrace of the 1.1570 to 1.1177 2019 (EBS) drop.
Solid resistance should appear at the tenkan line, which is currently 1.1298, and could limit a further short squeeze.
Only a daily close above 1.1327, 38.2 percent of the same 1.1570-1.1177 drop, will defer.
FX traders will be watching for U.S. CPI data due later on Tuesday and euro zone industrial production on Wednesday.
Related comment nL1N20Y06H.