Euro Rebounding in Forex Trading Today

The euro is rebounding in forex trading on the currency market today. The 16-nation currency is showing some strength after a couple weeks of taking a beating. Indeed, even with sovereign debt concerns of euro zone nations, EUR/USD is moving higher in currency trading.

GFT's Boris Schlossberg offers some insight in FX360 as to why the euro is showing some strength in forex trading:

As we noted earlier,” Although the euro remains pressured by the political and fiscal upheaval in the union, the currency is now grossly oversold after declining for 12 out of the last 15 days. The latest data from CFTC shows that euro positioning has turned strongly negative with shorts growing to 43.7K contracts from 39.5K the period prior. The increase in shorts is now at a record in the series and argues for some sort of technical bounce as late comers get squeezed.” The push higher was led by Russians, who are typically very adroit traders of inflection points in the FX market and suggests that for now the EUR/USD may have found a temporary bottom at the 1.3600 level.

With the U.S. dollar expected to fall back some this week, and with the euro being oversold to the point where a correction is needed, it looks like things could change -- at least temporarily -- for the euro in forex trading.