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Net-Shorts
The euro could also get a short-term bounce after net-short contracts on the euro-dollar on the Chicago Mercantile Exchange hit a record high of 174,000. According to Ashraf Laidi, the chief global strategist at CityIndex, some traders could use the data as a contrarian signal to buy.
"Traders sometimes view such ‘extreme’ data as a contrarian signal, suggesting a turnaround, or at least a stabilization, in the prevailing trend," Laidi wrote in a note to clients.
"It's as good as any week to expect some kind of a short-squeeze in euro positioning, " Nizam Idris, managing director and head of strategy at Macquarie's fixed income and currencies, told CNBC's "Cashflow."
"The market is extremely short euro right now, very long the dollar and then we're entering into a week where you have a holiday truncated week in the U.S., plus payrolls at the end of the week," Idris said. "PMIs - China, Europe as well U.S. PMI, ISM numbers are all due at the end of the week. So I guess this is as good a time for position-squaring."