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CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

EUR/USD: Both retail and CoT bias shifts to majority long

USD outperformance entices shorts into closing out, institutional bias in long territory for the first time since 2018.

EURUSD Source: Bloomberg

EUR/USD Technical analysis, overview, strategies, and levels

Although the euro didn't underperform compared to commodity and high-beta currencies, it was in for serious retreat against the US dollar last week, taking EUR/USD's price to fresh lows and aiding breakouts of key pivot points in line with its volatile technical overview. Data out of the Eurozone was a disappointment with preliminary IFO figures out of Germany showing their worst reading since 2009, and US data mostly failed to impress. Low-impacting data today will hold less relevance in the face of tomorrow's string of preliminary manufacturing and services PMIs.

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EURUSD TA Source: IG charts

IG client* and CoT sentiment for EUR/USD

In sentiment, retail bias has shifted from a previous majority short 55% to a majority long 62%. That's also the case for larger speculative traders according to the latest CoT (Commitment of Traders) report, with a reduction in euro shorts by 51,849 lots outdoing a smaller reduction in longs by 6,687 lots, and shifting sentiment to majority long for the first time since September of 2019.

EURUSD sentiment Source: IG charts

EUR/USD Chart with retail and institutional sentiment

EURUSD chart Source: IG charts

*The percentage of IG client accounts with positions in this market that are currently long or short. Calculated to the nearest 1%, as of today morning 8am.

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This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
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