EUR/USD bulls looking to reload longs for a breach of 1.1620

• EUR/USD has been capped at the 1.16 handle but remains technically bias to the upside. 
• Sustained weakness in the greenback is evident in longs getting squeezed.
• DXY "recently failed above the 30-day upper Bollinger band, usually, a sign the market is technically overbought, increasing the risk of a decline to the 30-day lower Bollinger band, now at 93.984," - Pronita Naidu, analysts at IFR Markets.

EUR/USD has been capped at the 1.16 handle, having made a temporary high of 1.1608 and from a low of 1.1551. EUR/USD has recovered up to the 100-hr SMA but has fallen shy of the bullish territory above 1.1620 so far as the dollar take up the advantage of the DE/US yield spread.

The US 10-yr yields are sitting pretty up at 2.96% within the day's range of between 2.93-2.97% although the DXY is plateaued in its recovery at 95.17 within the day's range of 94.9940-95.3680 while commodities take up a bid and risk is fully on in the North American session with US benchmarks making multi-month highs. There was a mild recovery in the CNH overnight which gave way for a boost in the commodity sector and in weighed on the DXY.

Sustained weakness in the greenback is evident in longs getting squeezed

EUR/USD was able to scramble away from the 1.15 barrier threat territory with the DXY falling further south of its recent 2018 highs up at 95.65 and indeed, the threat of sustained weakness in the greenback is evident in longs getting squeezed.

Pronita Naidu, analysts at IFR Markets explained that the IMM data for the week ending July 31 showed the futures market net long an equivalent cash position of $20.06 billion, down from $20.33 billion the previous week:

"Dollar positioning is derived from net contracts of IMM speculators in the yen, euro, British pound, Swiss franc and Canadian and Australian dollars. Speculators were net long dollars for a seventh straight week, after being short for 48 consecutive weeks. But the USD index, which tracks the dollar versus a basket of six currencies, is struggling to retest the 2018 peak at 95.656 registered on July 19. It recently failed above the 30-day upper Bollinger band, usually a sign the market is technically overbought, increasing the risk of a decline to the 30-day lower Bollinger band, now at 93.984."

EUR/USD levels

Valeria Bednarik, chief analyst at FXStreet explained that the pair retains its positive tone in the short-term, albeit noting that the advance has been so far little relevant in terms of trend, as the pair remains below the daily descendant trend line broken last week, currently around 1.1620, also a strong static resistance level:

"In the 4 hours chart, the price has extended its advance above a still bearish 20 SMA, but remains below the larger ones, while technical indicators entered positive territory before losing upward strength. Seems unlikely that the rally can extend beyond the mentioned resistance but if it does, the next line of selling interest will appear in the 1.1650/60 price zone. The pair will resume its downward trend on a break below 1.1550."