- US Greenback Shorts at a 3-Month Excessive
- Euro Longs Choosing Up
- CAD Consolidates as Longs Look Stretched
US Greenback Sentiment Weakens, EUR Longs Decide Up, CAD Consolidates – COT Report
Within the closing week of Could, speculators had as soon as once more elevated their bearish publicity within the US Greenback with web shorts rising to a 3-month excessive, totalling $17.8bln. Whereas sentiment within the buck has deteriorated, main USD pairs proceed to commerce in slim ranges throughout this low vol interval. Final week’s NFP figures bolstered the case that the Federal Reserve has a bit extra respiratory room earlier than they’ve to debate tapering asset purchases. That stated, the foremost focus for USD merchants would be the US CPI report.
The Euro noticed one other modest rise in web longs ($815mln). Though, as I’ve famous beforehand, topside resistance at 1.2245 stays a stumbling block for the foreign money with failure to interrupt above placing stress again on the 1.21 deal with. Elsewhere, with the ECB anticipated to keep up PEPP purchases at a major tempo for Q3, this might maintain EUR/USD capped.
GBP web longs skilled a decent-sized pullback of $580mln (-4.4% OI) as outright shorts rose to a 4-month excessive. Within the close to time period, uncertainty stays over the UK choice as as to if a full reopening of the financial system will happen on June 21st. Nonetheless, whereas this may possible see a shift in sentiment, the brief time period ramifications for the UK financial system is restricted. On the technical aspect, the psychological 1.42 deal with continues to cap rallies, though, regardless of this, the pattern stays increased with GBP above 1.40.
Throughout the commodity currencies, promoting the Kiwi had largely been concentrated within the quick cash neighborhood. Elsewhere, web longs within the Canadian Greenback grew ever so barely and thus stays the biggest lengthy within the G10 complicated. Whereas there are causes to be bullish CAD, given the scale of the beneficial properties in current months, the foreign money seems to be settling in for a interval of consolidation above the 1.20 deal with.
Secure haven currencies had been in demand with JPY web longs reduce by 350mln, whereas CHF flipped web lengthy once more. Nonetheless, whereas the Japanese Yen continues to trace Treasury yields, I stay bearish on the Swiss Franc, significantly as SNB officers spotlight their need for a weaker foreign money.
Weekly FX Positioning
Supply: CFTC, DailyFX (Covers as much as June 1st, launched June 4th)
US Greenback Positioning
Supply: Refinitiv, DailyFX
Supply: Refinitiv, DailyFX
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