The weekly recovery in EUR/USD seems to have run out of legs in the 1.1920 for the time being, as the better tone in the risk appetite looks insufficient to push the spot further north.
Ideally, the pair needs to surpass this area of recent tops to mitigate some downside pressure, although the improved sentiment in the dollar post-FOMC event is still expected to persist for yet some time.
The upside in German yields has collaborated with the better note in the European currency, although, once again, this seems to be not enough to reverse the sharp selloff seen in past sessions.
It is all about the dollar now, inflation, and the timing of the Fed’s tapering, as market participants look to have already priced in the strong rebound of the economic activity in the region along with the re-opening of the economy and the improved pace of the vaccination campaign.
On the specs front, the latest CFTC report (Monday) showed an important drop in EUR goss longs and shorts, still keeping the net position in levels last seen in early March and still showing how crowded that trade is.
EUR/USD Long (Buy)
ENTER AT: 1.19170