Speculators Inching Closer To Turn Their Bets Into Net Euro Long

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Speculative traders on the Chicago Mercantile Exchange moved very close to turn their wager into net EUR longs on year-end position adjustments, data from the Commodity Futures Trading Commission (CFTC) showed on Friday.

Traders continued to cover their EUR bets slashing their short EUR position by 70% after cutting it by another 5% last week to reach a total of $1.6 billion as of Tuesday.

In a parallel move, traders aggressively dumped USD by increasing their short USD bets by 137% to reach a total of $7.6 billion as of Tuesday.

Looking ahead, the market will get into a quiet holiday mode next week which unlikely to see any substantial change in the traders bets. However, for Barclays Capital, this mode could actually push EUR/USD into wild up/down rounds on year-end flows. As such, Barclays recommends to its clients to stay on the sideline.

"Happy to sit on the sidelines and see how this all pans out – judging by the px action over the last few days, strap yourselves in. One sneezes and this moves 20ticks at the moment," Barclays clarifies.

CFTC's data also showed that traders decreased their open short JPY position by 7% to reach a net of $13.3 billion. Traders also increased their open long AUD position by 6% from a week earlier to reach a net of $10.3 billion.

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