EUR/USD's current rise is being fuelled by short covering, but traders are not that short and there are good reasons to sell.
So it's a rally that should present traders with better levels to sell nL1N20M087 nL1N20M06Z.
This year's EUR/USD moves have been defined by changes in spec betting and expectations for U.S. interest rates.
January's move to 1.1570 was driven by fear of a U.S. slowdown and rate cuts.
February's drop to 1.1234 derived from concern about the euro zone.
Throughout the whole period, traders have been short, but shorts are a fraction of what's required to have any real impact on EUR/USD, probably less than a third of what's needed to turn a trend.
That said, periods of adjustment influence the price, and short-covering is evident after the Fed pushed the spotlight back to low U.S. rates.
What hasn't changed is the big rate gap weighing on EUR/USD.
Picking EUR/USD tops ahead the 200-DMA at 1.1510 and 23.6 percent of 2018's drop at 1.1532 should pay.