, Technical Analysis. Specs were again sellers of other currencies versus the USD. The total net USD long position has grown to 431.8K contracts, up from 412.2 contracts last week and 222.8K contracts in the last four weeks. The biggest long USD position is against a short yen, followed by short A$, and then the euro and the pound.
The Australian Dollar, the Canadian and the New Zealand Dollar are deemed commodity currencies, and supposedly trade in the same direction a good part of the time. Currently specs are short all three currencies, for a total of 137.1K contracts. This is the biggest long USD and short commodity contracts in over ten months.
Most of the commodity currency short is held by specs is in the A$. Part of the A$ short was assumed in early May when the currency was tumbling down for above 100 and by June 16th the A$ was only trading a little above 92. Most of the 90+K short was established by then. The market did trade under the 90 handled, briefly, but for the last five weeks, specs are going side ways or not making money in their position. While most specs have profits in their short positions, when will these shorts start covering?
- US Dollar Index: There was a reduction in the long position in the DI by the small specs, but they still remain an out of balanced 5.3 ratio long. Speculators remain long the DI contract, but did have a small reduction of the long position in the latest period
- Euro (EUR/USD): There was little change in the euro during the poast week. The total spec net short in the euro increased to 65.5K, up from 62.1 in the prior week. To the extent there were any changes, we noted that the large spec reduced his new euro short and the small spec increased his short. Neither group has an out-of-balanced short position. Spreading represents a large 15.9% of the total OI.
- British Pound Sterling (GBP/USD): The total net spec short in the pound increased to 61K from 54K in the prior report. Both size specs are now about a 2.5 ratio short the pound. The net short position was increased position was increased, primarily by selling longs. The short position has been a losing trade during the past week. Spreading, mostly option trade, is 8.3% of the market.
- Japanese Yen (JPY/USD): The large spec, probably hedge funds, have a very large short bet on the yen and there was a slight increase in the most recent period. They are short by a 5.6 ratio. Total short positions in both size specs is now 120.2K. Open interest in spreading is large, over 10%. This currency has the highest spec participation in one side of the market.
- Swiss Franc (CHF/USD): Large specs did increase their shorts but the OI is very small in the Swissie. Both Spec groups are short the SF but their positions are not big.
- Canadian Dollar (CAD/USD): There was a small reduction in the total C$ net short to 37.1K, down from 40.4K in the previous week. There was also a small reduction in the C$ OI.The market has been working against the shorts since the end of the report.
- New Zealand Dollar (NZD/USD): The OI is bigger in this small market when the specs are bullish. This presently is not the case as both groups are short. Small specs increased their shorts in the last week and the big shorts reduced them. During the past week, the market has been working higher in the kiwi.
- Australian Dollar (AUD/USD): The OI in the A$ went up as specs increased their A$ shorts. The total spec short is back around the old high, 95.2K. Small specs are only a 2 ratio short, but the large specs are almost a 5 to 1 short. Spreading trade, usually options trade, has become more active and is now 6.4% of the total OI.
To view the COT report data released by the CFTC, please see the following files.
For general information about the COT report, please see the article The CFTC Commitments of Traders Report.