Euro Buyers Extend Longs But Aussie Traders Quiet
Axi | Jun 05, 2017 12:53
Originally published by AxiTrader
Welcome to this week's look at a subset of release late Friday in New York of the CFTC positioning data. In this report, I'll be looking at how positioning has impacted or may influence price action in the week and weeks ahead.
h2 In Summary/h2The CFTC data for the week to last Tuesday - May 30 - shows that in forex markets net positions in CAD shorts remain elevated, longs in the euro leapt to another new post-2011 high, and there weren't any big moves on other currencies. Although there were a few more GBP shorts added as the pound came under a little pressure.
Elsewhere WTI crude oil longs were fairly stable for the second week in a row and the big reduction in net long positions in US Treasuries suggests that a bumper non-farm payrolls had been expected.
We don't trade bonds at AxiTrader, not directly anyway. But movements in US 10-year bond rates have been the best indicator for the US dollar for some months now. As the 10's rallied, and as speculative positions grew so the US dollar index came under pressure.
That in itself helped Euro rally, put renewed downward pressure on the US Dollar (JPY), and even has allowed the Aussie dollar to hold up a little better than otherwise might have been the case.
US 10 year treasuries had a big fall in net longs last week as traders respected 2047's range low at 2.18% and the rate settled at 2.20/22% before non-farms. But with 10's closing in the US on Friday at 2.16% and with CFTC data suggesting limits were again available for a further rally in bonds.
That could keep the US dollar under pressure.
But the relatively extreme level of Euro longs in a week that the ECB has its next meeting means that there is room for disappointment if Mario Draghi and the Doves he leads on the ECB governing council can hold back Jens Weidmann and the hawks.
Get The App
Of course, positioning highlights risks, it doesn't guarantee their occurrence.
One interesting thing the CFTC data reveals is that positioning in the Australian dollar is essential flat. That means there is room for a move after this week's big data and even flow. Naturally that move could be in either direction, traders are just as likely to use limits to go short as long. It just depends on the data flow.
And it's worth mentioning the big short in the Canadian dollar. This chart of US Dollar (CAD) shows the shorts might be vulnerable if the trendline breaks. 1.3415/25 is the level to watch.
Have a great day's trading
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.