Couple of weekends ago, I discussed the weakness of global currencies (Article: Currencies: Foreign Currencies & Precious Metals Look Exhausted!), but by the end of the article I did give a warning signal that, from the short term perspective, the market sentiment seems to be heavily one sided against the Euro for the time being.
Today's Chart Of The Day looks at the current amount of speculators net short the Euro as of last Tuesday (reported by COT last Friday).
Last Monday morning in Asian trade we experienced a gap down in the Euro Dollar exchange rate and afterwards shorts got heavily squeezed throughout the week. Furthermore, this morning we have déjà vu in Asian trade as the Euro Dollar gapped down again.
This time around, the gap is much much bigger, and usually gaps get filled. Therefore, I expect a correction in the US Dollar all across the board and against other majors as well. Having said that, I still remain long the US Dollar against some currencies & precious metals.