As we enter the new week, the euro has gained big in five of the past six days. Early moves are small with GBP and AUD losing some ground. CFTC positioning showed a fresh extreme in CAD. Euro jumps to 1.1230s after Merkel says Germany's rising trade surplus is a result of the low euro, which is caused by ECB policies.
The market is slowing falling in love with the euro. Macron's win and the continued troubles for Trump along with the idea that the ECB and Eurozone economy are turning the corner has made for a powerful move in the past week.
EUR/USD has climbed from 1.0850 to 1.1200 and it finished last week on the highs. Technically, the pair continues to carve out six-month highs as it nears the US election night high of 1.1300. An inverted head-and-shoulders bottom targets 1.14 but we will have a closer look at the fundamentals in the day ahead.
The week starts with Japanese trade balance and Swiss sight deposits. Note that the calendar is quiet in the US with only Harker and Kashkari to liven things up. Canada is off on holiday.
CFTC Commitments of Traders
Speculative net futures trader positions as of the close on Tuesday. Net short denoted by - long by +.
EUR +37K vs +22K prior GBP -33K vs -47K prior JPY -60K vs -36K prior CHF -21K vs -15K prior CAD -98K vs -86K prior AUD +6K vs +26K prior NZD -12K vs -11K prior
It's the second week of big positioning shifts. The net Canadian dollar position is most-extreme on record. What's even more incredible that only two months ago, CAD was net long 22K and at that time the loonie was trading very close to where it is right now. The takeaway is that the vast majority of that position is close to underwater. With the OPEC meeting this week, the risks are high.
Otherwise, the yen move was a big one and the market has soured on the Australian dollar. With the euro grabbing some momentum and the spec market still relatively neutral, there is plenty of fuel to burn.