Commitments of Traders
This week speculators piled on JPY longs adding 13K of them. They also added 4K of the short positions. This made them 3.6K net long for this week. This is the most net long since they became net long back in March this year. It is clearly changed sentiment from the previous two weeks when they were net bearish with 5.4K positions in the red. It seems like speculators are getting bullish on JPY ( This is USDJPY bearish )
Speculators covered a lot of their long positions recently. This week they closed out whooping 22.3K longs and it the last 3 weeks they covered 51K long contracts. This accounts for almost half of the total. They held 113K longs 4 weeks ago. This is one very bearish signal for GBP for now. This week speculators were 9K net long, down from 26K in the previous week. 33 moving average of net positions comes in 17K so this market is officially in the downtrend.
This week we saw more bearish confirmation and more signals to suggest that the EURUSD rally might be ending. This week speculators dumped a massive 21K longs and only 1K shorts.Covered longs accounted for almost 10% of all speculative longs. All closed in one week. This is hugely bearish signal. Other metrics reported in the previous week were suggesting the top is now in place. As this needs a little bit more confirmation. The warning must be issued. This looks to me like EURUSD has topped and the downtrend is very likely.
This week speculators were bullish again.This time they added 2.4K fresh longs and covered 1.5K of their short positions. This made them 151K net long, which is up from 147K in the previous week and ALL TIME HIGH. My analysis is getting clearer every week. All metrics suggests that EURUSD rally we have seen in the last few months might be finally come to the end or at least the price might stage some major correction to the downside.
Speculators continue to be CAD bearish ( USDCAD bullish ) for a 3rd week in a row. This time they took some profits off the table. They covered 1.5K longs and 1.7K shorts. They were 31K net short, unchanged form the previous week. They clearly want to be CAD short. It is a fairly rare occurrence when the speculators find themselves on the wrong side of the trade. In this case, the price of USDCAD is dropping significantly while the speculators hold the other side of this transaction. It will be interesting to see what side will eventually prevails. In my view, the speculators will. It means the current downtrend in USDCAD is likely to fade soon?
Speculators took profits but they showed a strong bullish bias again. This week they covered both long and short positions but they closed out almost 3 times more shorts ( 9.7K ) than longs ( 3.5K). They were 40.3K net long. This is the highest level of net longs since 2014. The extreme level at that time reached 40K net long when the price collapsed from 1.71. We still have more room to go so the bias remains to the upside in the long term.
This week speculators turned from being net short back to be net long, exactly as I expected it to happen. This was next step in the pattern development I track. They added 15K new longs and dropped 3.3K shorts. This trade made them 18K net long, from being 779 contracts net short in the previous week.
There is a ST. Patrick’s weekend in Ireland. The charts below are last week’s. I can only update them tonight ( after 10pm ). unfortunately I will be travelling for the bank holiday weekend and I will not have an access to MT4 until Monday night. I will update the charts then. I’m sure most of you have our awesome COT indicator by now so you will be in the position to see the data.
USDJPY printed multi - year lows after President Trump announced tariffs last week. With FOMC voter Dudley calling four rate hikes gradual, the dot plot forecast will also be revised upwards. Based on these facts, USD/JPY should appreciate but the rally would be short lived in my opinion. If China starts talking about their own tariffs or expresses less desire to buy U.S. Treasuries (again), USD/JPY will break 105. The downside comes as no surprise to us. My bias remains bearish.
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