The euro currency may soon be in close competition with the Argentine peso for world's most hated currency. After falling more than 1000 pips in less than 3 months vs. the US dollar (from over 1.3700 in early July to 1.2684 today), euro futures speculators are now placing record short bets against the eurozone's single currency:

Click to enlarge

Euro_CoT_9.26.2014

Source: cotbase.com

Small speculators now hold a record net short interest in euro futures at the same time that the EUR/USD pair has reached a parabolic oversold condition on multiple time frames:

Daily

EUR_USD_Daily_9.26.2014

Weekly

EUR_USD_Weekly

All the elements are in place for a short squeeze very soon:

  • Extreme oversold
  • Extreme bearish sentiment
  • Record speculative net short interest

And bullish seasonality adds to what is one of the most enticing risk/reward trading propositions out there currently (long EUR/USD or long Euro FX futures)....

EUR seasonality