The ‘smart money’ is betting against the US dollar
US Dollar Index:
The NYBOT traded contract saw the commercials
increase their positioning against the dollar as contract breached the 90.00
handle, suggesting that commercials expect the dollar rally to stall. Volume
continued to expand during the last weeks rally, indicating an increased
pressure by the dollar bulls, with the On Balance Volume indicator continuing to
signal to an increasing upside volume that is adding to the positive long term
outlook regarding the Dollar Index.
Speculative positions increased their net long
exposure to 13,683 net long contracts, while commercials increased their net
short position to 16,075 net short contracts, thus adding to the outlook that
the next move to the downside will most likely see the Dollar Index reverse
direction and head below 90.00. Open interest rose by 3,551 to 24,239 contracts
outstanding.
EUR:
Euro speculative positions were reduced with only
855 net long currently outstanding with overall open interest rising by 13,423
contracts from the previous week to 144,421 contracts outstanding. Commercial
traders increased their net long positioning with 3,757 contracts, which adds to
the outlook that euro once again might head above the 1.2000 handle and test the
1.2100 figure.
GBP:
British pound traders slightly reduced their
short speculative positions as the pair once again headed above the
psychologically important 1.7500 figure, with speculative traders holding net
short 21,050 contracts. Commercial positioning increased slightly as large
traders kept their long exposure in the sterling with commercial net longs
totaling 25,436 contracts, thus adding to an outlook that banks and other
institutions expect the sterling to test the 1.8000 handle. Open interest
decreased with 5,671 contracts being liquidated, thus brining total to 89, 729
contracts outstanding.
CHF:
Swiss Franc speculative traders continued to add
to their net short positions with net short positions as net shorts rose to
30,982 contracts. Commercials increased their long exposure to the contract with
overall net long rising to 47,683 contracts, thus adding to a view that the
Swiss Franc is about to aim toward the handle 1.2500 figure. Open interest rose
by 7,945 contracts to 80,232 contracts outstanding.
JPY:
Japanese Yen speculative positions remained net
short as the pair tested the offers below the 116.00 figure, with only 606
additional speculative short contracts coming to the market to total net
speculative shorts of 66,641 contracts. Commercials continued to add to their
net long positions with 77,065 net long commercial contracts outstanding as
large institutional traders most likely expect the pair to head above the 116.00
handle. Open interest rose by additional 23,517 contracts to 199,678 contracts
outstanding.
CAD:
Canadian dollar speculative positions remained
net long, with speculators liquidating some of their net long positions with
42,812 net long contracts in the market. Commercials maintained their net short
positions with 60,600 net short commercial contracts outstanding as
institutional traders expect the Loonie will most likely break above the 1.2000
handle. Open interest rose by 3,207 contracts to 109,147 total contracts
outstanding.
AUD:
Australian dollar speculative positions remained
net long, with speculative traders reducing their long bets by 5,886 contracts
to 11,062 net speculative long contracts as the pair continued to trade
sideways. Commercial traders and hedgers significantly reduced their net short
exposure to 15,435 net commercial shorts as large institutions most likely
expect the pair to remain range bound. Open interest rose by 3,769 contracts to
63,897 total contracts outstanding.
Sam Shenker
Sam Shenker is a Technical Currency Analyst for Forex
Capital Markets (FXCM). Sam is the author of the Daily and Weekly Technical
Research reports at FXCM. His reports include: Daily Technicals, Weekly Crosses
and the Weekly Chart Pack. Prior to joining FXCM, Sam spent a number of years on
Wall St trading equities, equity derivatives and futures. He also specialized in
research and analysis of high yield bonds, corporate bankruptcies,
restructurings, reorganizations and venture capital.