News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bullish
Oil - US Crude
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Wall Street
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Bearish
GBP/USD
Bullish
USD/JPY
Bearish
More View more
Real Time News
  • Heads Up:🇨🇳 Industrial Profits (YTD) YoY (DEC) due at 01:30 GMT (15min) Previous: 2.4% https://www.dailyfx.com/economic-calendar#2021-01-27
  • The Australian Dollar may be at risk of losses against the New Zealand Dollar after an unexpectedly high NZ inflation reading sent AUD/NZD towards challenging short-term rising trend support. Get your market update from @ddubrovskyFX here:https://t.co/PfV9MCIvw1 https://t.co/iLTliBJaXG
  • Wall Street Futures Update: Dow Jones (+0.04%) S&P 500 (+0.09%) Nasdaq 100 (+0.47%) [delayed] -BBG
  • The Bitcoin/Ethereum ratio’s break to its lowest levels since August 2018 suggests that ETH may continue to outperform BTC in the coming weeks. Key levels to watch for Bitcoin and Ethereum. Get your $btc market update from @DanielGMoss here:https://t.co/mo3rw7bP4v https://t.co/qKJMkhbdkN
  • Overlooked this past session given the extreme volatility in heavily shorted US stocks: the PBOC warned of an asset bubble as it drained liquidity; the IMF said Biden's $1.9 tln stimulus could add 5ppt GDP to the US over 3 years and ECB made a thinly veiled threat over $EURUSD
  • 🇦🇺 Inflation Rate QoQ (Q4) Actual: 0.9 Expected: 0.7% Previous: 1.6% https://www.dailyfx.com/economic-calendar#2021-01-27
  • 🇦🇺 Inflation Rate YoY (Q4) Actual: 0.9% Expected: 0.7% Previous: 0.7% https://www.dailyfx.com/economic-calendar#2021-01-27
  • 🇦🇺 Westpac Leading Index MoM (DEC) Actual: 0.12% Previous: 0.69% https://www.dailyfx.com/economic-calendar#2021-01-27
  • Heads Up:🇦🇺 Westpac Leading Index MoM (DEC) due at 00:30 GMT (15min) Actual: 0.12% Previous: 0.69% https://www.dailyfx.com/economic-calendar#2021-01-27
  • Heads Up:🇦🇺 Inflation Rate QoQ (Q4) due at 00:30 GMT (15min) Expected: 0.7% Previous: 1.6% https://www.dailyfx.com/economic-calendar#2021-01-27
CoT – Large Specs Turn Long the Japanese Yen for First Time in 17 Months

CoT – Large Specs Turn Long the Japanese Yen for First Time in 17 Months

Paul Robinson, Strategist

CoT Highlights:

  • Large speculators long Japanese yen first time since Nov 2016
  • Aggressive covering past few months for a relatively small move
  • Could it mark beginning of atrend? Two factors corroborate this notion

For shorter-term sentiment readings, see theIG Client Sentiment page.

This past week’s report highlighted a noteworthy change in Japanese yen positioning, and while not a single-week extreme like we saw a couple of weeks back, it did mark the end of a trend of short positions held by large speculators. The group has been short the currency since late 2016, and with the relatively small move we have seen recently in price they have been spurred to cover and turn net-long. There are a couple of factors that suggest this was a 'logical' move.

Each Friday, the CFTC releases their weekly report of traders’ positioning in the futures market as reported for the week ending on Tuesday. In the table below are key statistics for net positioning of large speculators (i.e. hedge funds, CTAs, etc.). This group of traders are largely known to be trend-followers due to the strategies they typically employ. The direction of their position, magnitude of changes, as well as extremes are taken into consideration when analyzing what their activity could mean about future price fluctuations.

Key stats: Net position, one-week change, and where the current position stands relative to the past 52 weeks.

CFTC CoT stats

Large speculators long Japanese yen first time since Nov 2016

It isn’t a large long position at 3.6k contracts, and it wasn’t a large weekly change at +7.2k contracts, however; the changes compounded in recent months has taken large speculators’ historically large 125k+ short position in January and turned it to a long while JPY rallied only a relatively small amount versus USD.

Large speculators in aggregate across all FX futures contracts have a relatively good long-term track record for identifying intermediate to long-term trends (especially in the euro). This recent flip may be yet another timely call, for a couple of reasons.

Stock markets are showing a significant amount of instability. In the past, the Japanese yen has typically seen buying during times of distress in the ‘risk-on’ trade, as was the case from January to last month. More selling in the stock market looks likely given where we are in the long-term cycle in the S&P 500.

Last year we saw a historically small range in USD/JPY. That range was snapped to start 2018 and appears more likely than not to continue, with not only aforementioned factor (sour risk sentiment), but also on the notion that breakouts after extended ranges tend to stay in motion for a period of time.

See how sentiment changes could tie into the DailyFX Q2 Forecasts.

Chart 1 – JPY Positioning

Japanese yen positioning

Chart 2 – USD/JPY Weekly

USD/JPY weekly price chart

Large speculator profiles for major FX & markets:

US Dollar Index (DXY)

CoT – Large Specs Turn Long the Japanese Yen for First Time in 17 Months

Euro

CoT – Large Specs Turn Long the Japanese Yen for First Time in 17 Months

British Pound

CoT – Large Specs Turn Long the Japanese Yen for First Time in 17 Months

Japanese Yen

CoT – Large Specs Turn Long the Japanese Yen for First Time in 17 Months

Australian Dollar

CoT – Large Specs Turn Long the Japanese Yen for First Time in 17 Months

New Zealand Dollar

CoT – Large Specs Turn Long the Japanese Yen for First Time in 17 Months

Gold

CoT – Large Specs Turn Long the Japanese Yen for First Time in 17 Months

Silver

CoT – Large Specs Turn Long the Japanese Yen for First Time in 17 Months

Copper

CoT – Large Specs Turn Long the Japanese Yen for First Time in 17 Months

Crude Oil

CoT – Large Specs Turn Long the Japanese Yen for First Time in 17 Months

S&P 500 (E-mini)

CoT – Large Specs Turn Long the Japanese Yen for First Time in 17 Months

Resources for Forex & CFD Traders

Whether you are a new or experienced trader, we have several resources available to help you; indicator for tracking trader sentiment, quarterly trading forecasts, analytical and educational webinars held daily, trading guides to help you improve trading performance, and one specifically for those who are new to forex.

---Written by Paul Robinson, Market Analyst

To receive Paul’s analysis directly via email, please SIGN UP HERE

You can follow Paul on Twitter at @PaulRobinsonFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES