EUR/USD: Speculators are their most net short since June 2019

• Net short positions in EUR/USD have reached the highest level in 35 months. 
• The path of least resistance is to the downside, but signs of risk reset may yield a minor bounce. 

The bearish sentiment around the EUR/USD pair is currently at its strongest in eight months. 

Euro speculator positions have dropped by 10,000 in each of the last three weeks and totaled -85,669 in the week ended Feb. 11. That is the most bearish net position
since June 2019. 

Worst weekly close in nearly two years

Euro closed last week at 1.0829 to print its weakest weekly close since April 2017. Notably, the single currency produced a big red marubozu candle for the second
straight week – a sign the sellers are in control. 

While the path of least resistance is to the downside, deeper losses may be preceded by a bounce as the short-term technical studies are now reporting oversold conditions. 

Further, the risk is holding up well despite fears the world's second-largest economy is coming to a near standstill, courtesy of coronavirus outbreak. At press time, the S&P 500 futures are up 0.20% and the Shanghai Composite is adding 1%. 

The uptick could be associated with the decision by China's central bank to pump 100 billion yuan into the financial system. The data docket is light with the US markets closed on account of the President's Day holiday. 

Technical levels