We only have exact data to go on from the CFTC, where most recent figures put EUR shorts at a notional equivalent of USD23.4 billion and that’s even before we saw the big break below 1.2625, so we can presume that short positions have increased since then.
Latest Prime Broker reports also put EUR shorts at extreme levels, particularly EUR/JPY, and I’m guessing that these positions will at least equal the size of the CFTC numbers.
That said, with Sovereign players now selling EUR in significant size and with reserve managers seemingly avoiding EZ debt, there seems to be a dearth of buyers to force the shorts to cover.
In EUR/USD, 1.2625 is the next big level to watch with plenty of stop-loss buyers directly above there. This may be one of the few levels where it may make sense for daytraders to try buying a break with a tight trailing stop-loss order.
