EUR/USD retreats

A recent rally of EUR/USD did not prove to be sustainable, as the pair did not manage to gain a foothold above the round level of 1.38 in order to extend the advancement. Accordingly, there is a significant risk that the currency pair will fall back beneath the down-trend line, thereby reinstating the bearish outlook. Nonetheless, on the daily and monthly time-frames the Euro is still considered to be capable of appreciating relative to the buck.

The sentiment towards EUR/USD has finally started changing. The percentage of short positions, 10-day average of which stands at 65.5%, fell from 68% down to 59% amid the increased volatility in the market.