EUR/USD trims gains even as Asian stocks clock 29-month high

• EUR/USD faces rejection at 1.1930 despite risk-on in Asian equities. 
• Record bullish positioning makes the EUR vulnerable to sudden pullbacks. 
• An above-forecast Germany preliminary CPI number is needed to restore the recent uptrend. 

EUR/USD is now trading near 1.1910, having clocked a high of 1.1930 during the Asian trading hours. 

The pair has pulled back from 1.1930 despite the risk-on action in the Asian stock markets. According to Reuters, the MSCI's broadest index of Asia-Pacific shares outside Japan is trading at the highest since March 2018. Japanese stocks have also gained 1%. 

The risk sentiment seems to have been buoyed by the better-than-expected China Manufacturing and Non-Manufacturing PMI numbers for August and the Federal Reserve's recent decision to adopt a more relaxed approach to controlling inflation.  Even so, the safe-haven dollar is showing some resilience. 

One possible reason for the lack of convincing move higher in EUR/USD could be the extreme bullish positioning in the market. Speculators increased their bullish bets on the common currency by 14,809 contracts to a new all-time high of 211,752 contracts in the week ended Aug. 25, the data released on Friday showed. 

The record bullish positioning makes the currency pair vulnerable to a sudden pullback. However, a more substantial buying pressure may emerge, lifting the currency pair to recent highs above 1.1960 if the preliminary German consumer price index for August, due at 12:00 GMT on Monday, beats estimates. 

Technical levels