EUR/USD: Futures OI Increased by 3.7k Last Friday
Preliminary data from the CME Group
shows that futures traders added new business in the 6E contract
(EUR/USD) last Friday, a day in which the pair broke a key area of
support at 1.1350, suggesting that the decline is being supported by new
players.
Open interest shows increase during 1.1350 breakout day
The increase in open interest* on Friday, May 13th, was of 3,700
contracts that were added in what was a decisive bearish directional
day, implying potential for follow through to the downside this week,
should intrinsic value (Fed fund rates) and risk profile (risk on/off)
agree.
*Note, if instead of an increase in open interest in the 6E contract
last Friday, we saw a negative reading, that implies a withdrawal of
liquidity, via long EUR players closing their positions, also referred
as long liquidation; when that occurs, despite the depreciation in the
Euro, it implies no substance/commitment behind the bear move.
