Forex futures and options markets have aggressively bet on a US Dollar recovery against the Euro and other key counterparts, leaving scope for a short-term correction in the context of a broader Greenback recovery. Indeed, CFTC Commitment of Traders data shows Non-Commercials hold a record notional net-short position in the Euro against the US Dollar, leaving relatively little room for further selling.

Forex futures and options markets have aggressively bet on a US Dollar recovery...