A close below 1.0947 would open up a Bearish key day, which could lead to a further set-back in EUR/USD after a few solid weeks of gains.
A breakout should keep traders watching the early March higher near 115.
In fact, traders have remained net-short since Apr 20 when Germany 30 traded near 11981.6; price has moved 6.0% higher since then.
On Monday , USD/JPY traded above the daily Ichimoku cloud as JPY weakness remained taking the pair to the higest levels since mid-march and setting up a move above the 100-DMA (113.15).
We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests Germany 30 prices may continue to rise.
Dollar Gains as Traders Seek Equilibrium Levels, Fresh Drivers
as informed in The dollar gained versus all of its G-10 peers as Treasury yields rose, with markets seeking fresh drivers and equilibrium levels after a strong U.S. employment report on Friday and as French election risk evaporated.
The Bloomberg dollar index rose to its highest since April 12 as traders mulled next month’s Federal Reserve decision and further European elections.
Flows were moderate as traders quickly locked in gains after the euro rose to its highest since November following Emmanuel Macron’s victory in the French runoff, an outcome that was signaled by daily opinion polls.
as informed in On top of the latest surge in the cash market, investors are looking to add upside bets through options, according to foreign-exchange traders across Europe.
Investors bet at least $12 billion this week on the dollar extending its rally against the yen, as the odds improve for a Federal Reserve rate increase next month and technical charts favor bulls.
Dollar puts trade on a 38-basis-point premium over calls on the one-month tenor, which compares to an average in the past year of 105 basis points.
The pair extended the rally on Tuesday and rose to a high of 113.86 as of 11:45 a.m. London time.
Yen haven demand has also lost traction, as the French election result provided a market-friendly outcome, as shown by risk reversals, a gauge of market positioning and sentiment.