Cash Back Forex | May 22, 2012 02:40AM ET
It was an active week for euro traders. The total size of the speculator short in the euro versus the USD increased to 219,642 contracts, up from 183,685 in the previous week.
When the large short euro/long USD position is removed from the mix, the net USD position against the rest of the market is only a 10K long. The total net USD long when compiled it is 228,774, up from 138,231 in the previous period. Speculators are holding big short USD long GBP positions, 47,668 contracts, and a big long in the CAD 67,953 contracts.
Some of the currency markets are showing signs of liquidation, for example the pound yen and the AUD, but not the euro. With the very large spec short position in the euro, will there not come a time when European politicians will present another euro saving measure? When that happens a short covering rally might be explosive.
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