China and US agree to extend trade tariff truce, says Li
Investing.com - The euro has found fresh support as speculative positioning on EUR/USD reached its highest level since January 2024, according to data released by the Commodity Futures Trading Commission (CFTC) on Monday.
Net long positioning on EUR/USD stands at 15.6% of open interest as of July 15, a relatively contained figure considering the currency pair is trading almost 10% above early-2024 levels. The CFTC figures, which isolate speculative positioning, suggest that capital and hedging flows are playing a more significant role in the dollar’s recent weakness.
Speculation about a potential no-deal scenario in US-EU trade negotiations has intensified, with reports indicating some EU countries are advocating for retaliatory measures as prospects for a trade agreement diminish. Market observers note that the Trump administration has historically shown limited tolerance for such retaliatory actions, raising concerns about a possible temporary spiral into reciprocal tariff escalations.
The European currency currently faces no domestic tariff-related pressure, and markets are not pricing in a more dovish tone from the European Central Bank ahead of its Thursday meeting, with the next interest rate cut still expected in December.
Analysts at ING suggest EUR/USD lacks sufficient bullish momentum to return to early July highs near 1.180, with 1.160 appearing a more appropriate anchor than 1.170, given the risks of further hawkish repricing by the Federal Reserve.
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