Friday's IMM positioning data may show net EUR/USD positioning move back to net long as the dollar index weakened throughout the August 22-28 reporting period.
EUR/USD generally added to gains from its August 15 low at 1.1301, which coincided with its flip to to net short for the first time in 66 weeks.
Recent EUR/USD gains have come on short-euro profit-taking, despite falling European rate hike sentiment, and gained momentum after Fed Chairman Powell's dovishly interpreted speech at Jackson Hole last week.
The euro's gain has also come amid reduced late-summer liquidity. But, recent euro strength may be fleeting. Today's weak German HICP nAPN007D00 and euro zone data misses nS8N17B02J do not bode well. The Fed is widely expected to hike 25bps at the Sept 25-26 meeting and possibly another 25bps in December, making it likely that the euro, and EUR/USD IMM longs, will resume their declines as seasonal market liquidity recovers.