Eurozone CFTC EUR non-commercial net positions edged down to €33.5K from €40.2K in the previous reading. The shift points to a softer net long stance in euro futures positioning over the latest reporting period.
CFTC data track speculative positioning across currency futures, separating non-commercial accounts from commercial hedgers. The latest move leaves the net figure lower than before, with positions slipping by €6.7K from €40.2K to €33.5K.
Speculators Trim Long Euro Positions Amid Softer Data
We are seeing a notable shift in sentiment as net long positions on the euro have been trimmed. The drop from 40.2k to 33.5k contracts indicates that some large players are taking profits or reducing their bullish bets. This suggests a potential loss of upward momentum for the EUR/USD pair.
This change aligns with recent data showing Eurozone inflation cooling to 2.1%, nearing the ECB’s target. With the latest manufacturing PMI dipping to a contractionary 49.5, we anticipate the European Central Bank will sound more cautious in its upcoming statements. This economic softness makes holding long euro positions less attractive.
Diverging US and Eurozone Outlooks Drive Currency Moves
At the same time, the U.S. economy appears more resilient, with the latest jobs report surprising to the upside and showing continued labor market strength. This divergence supports a stronger dollar, as it gives the Federal Reserve more reason to maintain its current policy stance for longer. We believe this growing policy gap is a key driver for the repositioning out of the euro.
For traders, this is a signal to consider hedging or initiating bearish positions. We see value in buying out-of-the-money puts on the EUR/USD pair to protect against a potential downturn. Alternatively, selling call spreads could be an effective strategy to profit from sideways or slightly declining price action in the coming weeks.
This setup is reminiscent of the period in late 2021 when the Federal Reserve’s aggressive policy stance drove significant dollar strength. History suggests that when such monetary policy divergence becomes clear, the trend can persist for several months. We should therefore be prepared for further euro weakness if these economic trends continue.
