Speculators were right again, given the fact that the price collapsed ( as expected ) and the fact that they have been covering shorts in a big way in the last few weeks. This week’s adjustments were only minor. They covered 1.7K longs and 1.3K shorts. Net positions sat at 55.5K, insignificantly changed from the 55.1K in the previous week. More downside to come in USDJPY.
The dollar managed to hold on to most of its overnight gains on Wednesday after investors scooped up safe-haven assets, including US Treasuries, on lingering fears of a further escalation in the Sino-US trade dispute. Losses in the euro in the previous session also helped support the dollar, as analysts warned of more risks for the single currency on uncertainty surrounding the euro zone economy and the bloc's political future. I currently hold few positions including short GBPUSD, GBPCHF, USDJPY, long & short USDCAD
The main event for the Euro is the result of the European Union elections. The single currency is currently finding support after the anticipated shift in favour of eurosceptic parties was not as great as expected, thus downside pressure has been limited. The main release for the U.S. Dollar in the coming week is the Personal Consumption Expenditure Index (PCE), which is the preferred inflation gauge for the Federal Reserve (Fed) since consumers contribute the largest share of economic growth in the U.S.
Similarly to EUR Futures, speculators were bearish on GBP. They covered 3.7K of their long positions and added a SIGNIFICANT amount of shorts ( 19.1K ) They were much more net short ( 26K ), compared to being 3.3K in the previous week. It seems like the recent collapse in GBP markets made speculators to load up on more shorts.
Euro ended the day higher after dropping to a fresh monthly low against the US dollar. This is a dramatic recovery fueled by pressure on the US dollar and profit taking right at the April lows. The latest economic reports were weaker than expected with service and manufacturing slowing in Germany and the Eurozone. The German IFO report also declined with the business climate index falling to its lowest level since 2014. Sterling also recovered its losses after falling to 1.26 My short EURUSD took profit, long USDCAD & short USDJPY are in money
European elections start on Thursday. Many investors worried that populist parties could make strong headway. Elections will be held in 28 countries across the European Union for seats in the 751-member European Parliament. Sterling fell to fresh 6 month lows against the greenback following softer inflation data and backlash towards Prime Minister May's withdrawal offer. I cancelled my long Oil, USDCAD is now filled. I placed two new trades on USDJPY; short and long based on daily and intra-day systems.
In Asian session we saw a sharp move in AUD & NZD pairs which broke the prices to fresh lows on both Aussie and Kiwi. I was unable to catch these moves due to the time difference.During London & NY sessions, apart from a short-lived volatility in GBP crosses, nothing really moved significantly to my liking.I entered new long USDCAD and OIL positions. GOLD short took profits, short EURUSD is still open and in money.
Speculators took profits this week. They covered 2K of their long positions and, at the same time they covered 13K of their shorts. They were 95K net short, down from being a record 106K in the previous week. It might be that the bottom in EURUSD is now formed and we might see a large push to the upside in the coming weeks.
The greenback traded higher against all of the major currencies.Better than expected US economic reports certainly helped as housing starts and building permits recovered from last month's declines.The rising dollar turned all of the major currencies lower but the weakest of them all is sterlingThe Reserve Bank of Australia refrained from cutting interest rates last month but at the time they had nothing positive to say about the economy.
The greenback traded higher on the hope that trade tensions will hurt other countries more than the US but it would be a mistake to think that US consumers and businesses will escape the pain.The worst performing currency today was sterling, which fell hard on the back of softer labor market data. Jobless claims increased in the month of April but the real problem was earnings. Average weekly earnings growth slowed to 3.2% from 3.5% in the month of March.
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