This Is What The COT Report Is Showing
With the dollar under continued
pressure, although
stretched at current levels, it seems only a matter of time before old highs on
the EUR are taken out. Meanwhile
comments from Japanese Finance Minister Tanigaki left yen bulls with something
to chew on as he indicated that it is dollar weakness not yen strength in
regards to the latest move lower in USD/JPY.Â
In fact, 106.80 had proven to be a tough level for many months now, and
that level has now been breached. There
were rumors that the BoJ had bought nearly $4 billion USD on Thursday and
Friday. While possible, perhaps
unlikely given that the BoJ is not shy about making their presence known. With a weak
Durable Goods report due out on Wednesday, the dollar will likely continue under
pressure until the data is known.
Meanwhile (as of 8:30 PM PDT Monday) the Dollar Index is
bearing down on fresh lows at 84.56. While
the momentum at this time makes it seem like a foregone conclusion that the
level will fall, some momentum based indicators are signaling oversold while
others are still pointing to lower levels.Â
Naturally some really strong Durable Goods numbers can change that in a
minute.
IMM Commitment of Traders Data from last Friday does not
show any sizeable build-up in speculative positions despite a strong week in the
major pairs. This suggests that the
recent move higher is not susceptible to weak longs being shaken out at this
time. The exception being the Swiss
Franc and the Yen. See chart below.
 
As always, feel free to send me your comments and
questions.
DaveÂ
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