CFTC data for the eurozone shows that EUR non-commercial net positions fell to €105.1K. The previous figure was €136.5K.
This change indicates a decline of €31.4K in the reported net positioning. The figures come from the latest CFTC release.
We are seeing a notable reduction in bullish conviction for the Euro among large speculators. The drop in net long positions by over €31 billion is a significant unwinding of previously optimistic bets. This suggests that the easy money in the Euro’s rally may be behind us for now.
This shift in sentiment aligns with recent disappointing economic data out of the bloc. German industrial production, reported last week for January, unexpectedly fell by 0.5%, and the latest flash estimate for Eurozone inflation in early March came in at 1.9%, just under the central bank’s target. These figures are giving traders reason to pause and question the strength of the Eurozone’s economic footing.
The European Central Bank is also a key factor, with recent rhetoric from board members hinting at a possible rate cut in the second quarter of 2026 to support growth. We saw the odds of a June rate cut increase to nearly 60% this week, a sharp contrast to the Federal Reserve, which is expected to hold rates steady. This policy divergence is putting downward pressure on the EUR/USD exchange rate, which has struggled to hold above the 1.0800 level.
For derivatives traders, this warrants a more defensive or even bearish posture in the coming weeks. We should consider buying puts on the Euro or establishing bearish put spreads to protect against a potential slide towards the 1.0650 support level. The weakening conviction means upside surprises are becoming less likely in the near term.
Looking back at the strong bullish consensus we saw build in the fourth quarter of 2025, this current pullback is a clear change in character for the market. Implied volatility on Euro options has been relatively low, and this shift in positioning could be an early signal that volatility may soon pick up. We believe long volatility strategies could become increasingly attractive if this trend of uncertainty continues.
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