US Dollar, EUR/USD COT Report –Analysis
- Euro Sees Yet Another Pick-Up in Net Longs
- US Dollar Selling for a 5th Consecutive Week
- Overall Sentiment Changes Relatively Muted
The Predictive Power of the COT Report
Source: CFTC, DailyFX (Covers up to Apr 14th, released Apr 17th)
EUR/USD Longs Rise as US Dollar Selling Continues - COT Report
In the week to April 14th, the latest CFTC data highlighted that investors continued to pile into US Dollar shorts as bearish bets rose for a 5th consecutive week to $10.5bln. However, the ultimate shift in sentiment had been relatively muted, given that the notable change in positioning had only occurred in the Euro.
Speculators raised their net bullish bets in the Euro by $1bln to total $11.9bln. However, while a large factor behind the increase in net longs has been due to a short squeeze, we are beginning to note a pick-up in gross longs, signaling that investors may be starting to have a constructive view on the Euro. That being said, we continue to see risks as skewed to the downside for the Euro, particularly against the US Dollar as the recent risk rally runs out of steam.
Positioning changes across commodity currencies had been relatively muted with marginal increases in AUD and NZD short bets. The latter remains the largest shorted currency among non-commercials, however, NZD positioning is roughly in-line with its 3-year average, while the Aussie is slightly more oversold. Sentiment changes in CAD had been flat, however, with oil prices continuing to remain on the backfoot, the outlook for the Loonie remains bearish.
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--- Written by Justin McQueen, Market Analyst
Follow Justin on Twitter @JMcQueenFX
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