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US Dollar Longs Reverse as EUR/USD & GBP/USD Shorts are Slashed - COT Report

US Dollar Longs Reverse as EUR/USD & GBP/USD Shorts are Slashed - COT Report

Justin McQueen, Strategist

COT Report – Analysis and Talking Points

The Predictive Power of the COT Report

How to Read the CFTC Report

US Dollar Longs Reverse as EUR/USD & GBP/USD Shorts are Slashed - COT Report

Source: CFTC, DailyFX (Covers up to October 22nd, released October 25th)

US Dollar Longs Reverse as EUR/USD & GBP/USD Shorts are Slashed, CAD Bulls Surge – COT Report

The latest CFTC positioning data showed that speculators slashed their USDnet long positions by $5.4bln against G10 currencies, marking the largest one-week positional change since July 7th. The notable reversal in USD positioning had predominantly been led by a $3.6bln reduction Euro net shorts, as well as speculators cutting their net shorts on the Pound by $1.6bln.

Much of the reduction in bearish sentiment on both the Euro and Pound had stemmed from the renewed Brexit optimism after the UK and EU agreed a Brexit deal. However, the latest CFTC data does not cover the period in which Brexit optimism has eased with parliament at a stalemate.

Elsewhere, investors have become increasingly bullish on the Canadian Dollar with net longs at the highest since February 2018 amid improving Canadian data, which in turn, has reduced the likelihood that the Bank of Canada will be considering near-term easing.

Yet again, safe-haven currencies are out of favour with bearish positioning in the Japanese Yen rising to $2bln (largest since mid-June), following a $1.3bln increase as political risks pertaining to US-China trade wars ease, given that prospects of a potential interim trade deal in mid-November rises.

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US Dollar

US Dollar Longs Reverse as EUR/USD & GBP/USD Shorts are Slashed - COT Report

EUR/USD

US Dollar Longs Reverse as EUR/USD & GBP/USD Shorts are Slashed - COT ReportUS Dollar Longs Reverse as EUR/USD & GBP/USD Shorts are Slashed - COT Report

GBP/USD

US Dollar Longs Reverse as EUR/USD & GBP/USD Shorts are Slashed - COT ReportUS Dollar Longs Reverse as EUR/USD & GBP/USD Shorts are Slashed - COT Report

USD/JPY

US Dollar Longs Reverse as EUR/USD & GBP/USD Shorts are Slashed - COT ReportUS Dollar Longs Reverse as EUR/USD & GBP/USD Shorts are Slashed - COT Report

USD/CHF

US Dollar Longs Reverse as EUR/USD & GBP/USD Shorts are Slashed - COT ReportUS Dollar Longs Reverse as EUR/USD & GBP/USD Shorts are Slashed - COT Report

USD/CAD

US Dollar Longs Reverse as EUR/USD & GBP/USD Shorts are Slashed - COT ReportUS Dollar Longs Reverse as EUR/USD & GBP/USD Shorts are Slashed - COT Report

AUD/USD

US Dollar Longs Reverse as EUR/USD & GBP/USD Shorts are Slashed - COT ReportUS Dollar Longs Reverse as EUR/USD & GBP/USD Shorts are Slashed - COT Report

NZD/USD

US Dollar Longs Reverse as EUR/USD & GBP/USD Shorts are Slashed - COT ReportUS Dollar Longs Reverse as EUR/USD & GBP/USD Shorts are Slashed - COT Report

For a more in-depth analysis on FX, check out the FX Forecast

--- Written by Justin McQueen, Market Analyst

To contact Justin, email him at Justin.mcqueen@ig.com

Follow Justin on Twitter @JMcQueenFX

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

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