The EUR/USD cross has been in a tight 10 cent range for roughly a year-and-a-half now and has settled near the midpoint of that range (at 1.10) just ahead of the July FOMC meeting. After last month's Brexit debacle, the single currency has managed to stabilize above 1.09. Subsequently, however, euro bulls have failed to recapture the upper half of the June/July range, which has potential negative (long-term) implications. That said, it has been a tireless sideways grind over the past few weeks as the spotlight in the foreign exchange market has primarily been on the Japanese yen and British pound. According to two of the largest FX brokers, (retail) traders are currently distributed evenly, with roughly half of orders positioned long and short. After a massive reduction in the number of positions (due to the heightened uncertainty of the Brexit vote), short-term players have slowly built back their positions, but at relatively low levels with respect to the average number of (open) positions.
As of late, it seems that traders are anticipating a bottom in the EUR/USD cross-rate. Since topping-out in the mid-1.11 area recently, (euro) long positioning has rallied from net 40% (positioning of all orders) to hover near the 50% mark. This is occurring while large speculators (who are typically positioned on the right side of the trade), according to the latest CFTC (futures positioning) data, are building a sizeable short position. Also, with both retail traders and short-term speculators no-where near extremes, today's Fed statement could give the US dollar bulls the push back towards 1.05 (EUR/USD).
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