EUR Signal: Neutral
EUR: Euro speculative interest is unsurprisingly similar to that of the US dollar, with the overall uptrend continuing despite falling net speculative long positioning in the EURUSD. Given the strength of the overall uptrend, this suggest that relatively limited speculative interest leaves scope for further euro rallies. Substantive turns tend to come at market extremes, and we have not yet seen peaks in Euro COT positioning.
US Dollar Index Signal: Neutral
US Dollar Index: Net shorts in the US dollar have actually declined through recent weeks, which gives us a mixed assessment on the potential for further dollar declines. On the one hand, decreased appetite for USD shorts suggests that the overwhelming downtrend may be due for a short-term correction. Conversely, the limited level of speculative interest may actually leave much further room for the dollar to fall. Whether or not the dollar index breaks to new lows will clarify our assessment.