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May 20 - 05:00 AM

EUR/USD - COMMENT-A Seismic Shift In Flows Is Influencing EUR/USD

By Jeremy Boulton  —  May 19 - 04:50 AM

For a long time traders have looked to betting to try and gauge the next EUR/USD move, but commercial positions may be having greater influence nL1N2D10A9.
EUR/USD betting has shrunk, which would not be a surprise during the coronavirus crisis, but it was shrinking before the crisis.
Speculation declined as low volatility reduced opportunities to make money.
After a brief spike this year, volatility has once again slumped.
In contrast to the decline in speculative flows reported by the Commodity Futures Trading Commission, commercial flows have soared.
It seems a crisis has intensified the will to hedge FX risk, which is obviously a prudent decision.
Volumes have rocketed.
Longs hit a record peak this year.
Shorts have doubled, almost matching their all-time peak.
Both have gained at least ten-fold in a few years.
Net commercial positions are short as is the net of spec and non-spec interests.
That's one reason why EUR/USD support is proving resilient this year.


Commerical EUR/USD longs Click here

EUR/USD net commercial Click here

EUR/USD commerical shorts Click here

Net spec EUR/USD positions Click here

Source:
Refinitiv IFR Research/Market Commentary

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