- Asian stocks at 29-month-high fail to prop EUR/USD.
- EUR/USD fails to clear 1.1930.
- Germany preliminary CPI surprise required to continue the uptrend in EUR/USD.
EUR/USD was at 1.1910 on Monday trading after hitting a high of 1.1930 during the Asian session. The pullback in the pair from 1.1930 occurred even after the risk-on mood in the Asian trading. The MSCI Asia Index ex-Japan was near the highest level since March 2018; Japanese stocks also went up.
The better than expected China Manufacturing and Non-Manufacturing PMI for August and the US Fed’s decision to give more room to the inflation numbers helped the risk-on mood. Even in such a scenario, the haven-linked dollar hasn’t ceded much ground.
The EUR/USD pair added 14,809 contracts to a new all-time high of 211,752 contracts in the week ended Aug. 25, according to the data released on Friday.
The excessive number of contracts positioned to benefit from a further upside in the EUR/USD could be working against the pair to continuing its up-move. Usually, the trend continues after shaking out the weak hands in such situations
However, if the trend resumes, the move will be sustainable. It could push the EUR/USD past 1.1960, especially if today’s preliminary German consumer price index for August beats estimates.
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