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Japanese Yen Strengthens to a Monthly High as Markets Anticipate a Bank of Japan Rate Hike

The USD/JPY pair fell to 155.08 on Tuesday, close to the monthly low. The Japanese yen gained strength as speculation grew regarding a potential interest rate hike by the Bank of Japan (BoJ), driven by hawkish commentary from BoJ officials, which increased the likelihood of this action.

Key factors driving yen strength

A possible rate hike would raise Japan’s short-term borrowing costs to 0.5%, the highest level since the 2008 global financial crisis. This decision would align with recent optimism about the economy’s ability to achieve sustainable inflation. Markets also expect the BoJ to revise its core inflation forecast upwards, with confidence growing that wage increases will help maintain the 2% inflation target.

Additionally, Japan’s Finance Minister Katsunobu Kato reiterated the government’s readiness to take measures to support the yen, adding further strength to the currency.

In the broader market context, investors are also evaluating the actions of US President Donald Trump on his first day in office, which included signing several executive orders and discussing plans for trade tariffs. These developments contribute to broader uncertainty, indirectly favouring the yen as a safe-haven currency.

Technical analysis of USD/JPY

On the H4 chart, USD/JPY experienced a pullback from the 156.56 level and is extending its downward wave towards 154.20. After reaching this level, a growth wave back to 156.56 is possible. This USD/JPY forecast is supported by the MACD indicator, with its signal line below zero and pointing downwards.

On the H1 chart, the pair is consolidating near 155.40, with expectations of a downward breakout to 154.20. After hitting this target, a corrective wave to 156.56 (a test from below) is possible. Further development of the downward wave could push the pair to 154.00. The Stochastic oscillator confirms this scenario, with its signal line below 50 and trending sharply downwards.

Conclusion

The strength of the Japanese yen reflects the growing expectations of a BoJ rate hike and supportive government policy. While technical analysis points to a further downside potential for USD/JPY in the short term, the pair’s movement will hinge on the BoJ’s upcoming decisions and broader market dynamics. On the downside, key levels to watch are 154.20 and 154.00, with 156.56 acting as a potential corrective target.

Disclaimer

Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.

Financial News Forex and Currency News

19 Jan

Speculators continue to raise US Dollar Index Bets into 2025

By InvestMacro

Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC).

The latest COT data is updated through Tuesday January 14th and shows a quick view of how large market participants (for-profit speculators and commercial traders) were positioned in the futures markets. All currency positions are in direct relation to the US dollar where, for example, a bet for the euro is a bet that the euro will rise versus the dollar while a bet against the euro will be a bet that the euro will decline versus the dollar.

Weekly Speculator Changes led by Canadian Dollar & US Dollar Index

The COT currency market speculator bets were just slightly lower this week as five out of the eleven currency markets we cover had higher positioning while the other six markets had lower speculator contracts.

Leading the gains for the currency markets was the Canadian Dollar (11,436 contracts) with the US Dollar Index (4,084 contracts), the EuroFX (3,727 contracts), the New Zealand Dollar (2,535 contracts) and Bitcoin (145 contracts) also showing positive weeks.

The currencies seeing declines in speculator bets on the week were the British Pound (-14,068 contracts), the Japanese Yen (-9,222 contracts), the Australian Dollar (-4,198 contracts), the Mexican Peso (-6,394 contracts), the Brazilian Real (-1,897 contracts) and the Swiss Franc (-813 contracts) also registering lower bets on the week.

Speculators continue to raise US Dollar Index Bets into 2025

Highlighting the COT currency’s data this week is the increase in the speculator’s positioning for the US Dollar Index that’s carried over from December into the new year. The large speculative US Dollar Index positions rose this week by over 4,000+ contracts and have now gained for five consecutive weeks. This recent rise in speculator sentiment has been carried over each week from December 17th to January 14th for a total +15,953 net contract boost over the 5-week period.

This has pushed the overall bullish speculator position above the +10,000 contract threshold for the first time since September 10th. The Dollar Index bets, previously, had spent a total of seven weeks in October, November and early December in bearish or negative contract territory before finally turning around in mid-December.

The Dollar Index futures price (DX) was slightly lower to close this week but overall the trend has been higher for the DX. Since the last short-term bottom on the weekly charts in September – the DX has advanced by over 9 percent and broken through previous resistance areas from 107.50 to 109.00. Currently, the Dollar Index price is sitting right around the 109.40 level with the weekly RSI signaling a slightly overbought level of 70.10.

Currencies Net Speculators Leaderboard

Legend: Weekly Speculators Change | Speculators Current Net Position | Speculators Strength Score compared to last 3-Years (0-100 range)

Strength Scores led by Bitcoin & Japanese Yen

COT Strength Scores (a normalized measure of Speculator positions over a 3-Year range, from 0 to 100 where above 80 is Extreme-Bullish and below 20 is Extreme-Bearish) showed that the Bitcoin (80 percent) and the Japanese Yen (62 percent) lead the currency markets this week.

On the downside, the New Zealand Dollar (3 percent), the EuroFX (6 percent), the Canadian Dollar (13 percent) and the Brazilian Real (19 percent) come in at the lowest strength levels currently and are in Extreme-Bearish territory (below 20 percent).

3-Year Strength Statistics:
US Dollar Index (33.1 percent) vs US Dollar Index previous week (24.6 percent)
EuroFX (5.8 percent) vs EuroFX previous week (4.4 percent)
British Pound Sterling (36.3 percent) vs British Pound Sterling previous week (42.6 percent)
Japanese Yen (61.9 percent) vs Japanese Yen previous week (65.6 percent)
Swiss Franc (22.5 percent) vs Swiss Franc previous week (24.1 percent)
Canadian Dollar (13.0 percent) vs Canadian Dollar previous week (7.9 percent)
Australian Dollar (21.2 percent) vs Australian Dollar previous week (24.2 percent)
New Zealand Dollar (3.0 percent) vs New Zealand Dollar previous week (0.0 percent)
Mexican Peso (31.8 percent) vs Mexican Peso previous week (35.1 percent)
Brazilian Real (19.0 percent) vs Brazilian Real previous week (20.8 percent)
Bitcoin (80.4 percent) vs Bitcoin previous week (77.3 percent)

Bitcoin & US Dollar Index top the 6-Week Strength Trends

COT Strength Score Trends (or move index, calculates the 6-week changes in strength scores) showed that the Bitcoin (64 percent) and the US Dollar Index (33 percent) lead the past six weeks trends for the currencies.

The Australian Dollar (-70 percent) leads the downside trend scores currently with the New Zealand Dollar (-34 percent), Brazilian Real (-17 percent) and the Japanese Yen (-13 percent) following next with lower trend scores.

3-Year Strength Trends:
US Dollar Index (32.7 percent) vs US Dollar Index previous week (23.7 percent)
EuroFX (-1.1 percent) vs EuroFX previous week (-3.1 percent)
British Pound Sterling (-8.5 percent) vs British Pound Sterling previous week (-3.2 percent)
Japanese Yen (-12.7 percent) vs Japanese Yen previous week (1.0 percent)
Swiss Franc (4.8 percent) vs Swiss Franc previous week (3.6 percent)
Canadian Dollar (-3.5 percent) vs Canadian Dollar previous week (-11.0 percent)
Australian Dollar (-70.3 percent) vs Australian Dollar previous week (-74.6 percent)
New Zealand Dollar (-33.7 percent) vs New Zealand Dollar previous week (-35.4 percent)
Mexican Peso (0.9 percent) vs Mexican Peso previous week (4.6 percent)
Brazilian Real (-16.6 percent) vs Brazilian Real previous week (-24.1 percent)
Bitcoin (63.9 percent) vs Bitcoin previous week (52.1 percent)

Individual COT Forex Markets:

US Dollar Index Futures:

The US Dollar Index large speculator standing this week resulted in a net position of 12,729 contracts in the data reported through Tuesday. This was a weekly lift of 4,084 contracts from the previous week which had a total of 8,645 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 33.1 percent. The commercials are Bullish with a score of 65.9 percent and the small traders (not shown in chart) are Bearish with a score of 39.7 percent.

Price Trend-Following Model: Uptrend

Our weekly trend-following model classifies the current market price position as: Uptrend.

US DOLLAR INDEX Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	64.5	24.0	8.8
– Percent of Open Interest Shorts:	36.7	55.2	5.4
– Net Position:	12,729	-14,288	1,559
– Gross Longs:	29,512	10,978	4,033
– Gross Shorts:	16,783	25,266	2,474
– Long to Short Ratio:	1.8 to 1	0.4 to 1	1.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	33.1	65.9	39.7
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	32.7	-31.7	3.2

Euro Currency Futures:

The Euro Currency large speculator standing this week resulted in a net position of -60,397 contracts in the data reported through Tuesday. This was a weekly advance of 3,727 contracts from the previous week which had a total of -64,124 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 5.8 percent. The commercials are Bullish-Extreme with a score of 97.7 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 0.0 percent.

Price Trend-Following Model: Downtrend

Our weekly trend-following model classifies the current market price position as: Downtrend.

EURO Currency Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	26.9	56.4	12.0
– Percent of Open Interest Shorts:	36.9	48.4	10.0
– Net Position:	-60,397	48,337	12,060
– Gross Longs:	162,760	341,025	72,682
– Gross Shorts:	223,157	292,688	60,622
– Long to Short Ratio:	0.7 to 1	1.2 to 1	1.2 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	5.8	97.7	0.0
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-1.1	4.7	-24.4

British Pound Sterling Futures:

The British Pound Sterling large speculator standing this week resulted in a net position of 438 contracts in the data reported through Tuesday. This was a weekly reduction of -14,068 contracts from the previous week which had a total of 14,506 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 36.3 percent. The commercials are Bullish with a score of 67.3 percent and the small traders (not shown in chart) are Bearish with a score of 29.8 percent.

Price Trend-Following Model: Strong Downtrend

Our weekly trend-following model classifies the current market price position as: Strong Downtrend.

BRITISH POUND Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	40.1	47.0	10.9
– Percent of Open Interest Shorts:	39.9	39.5	18.5
– Net Position:	438	14,985	-15,423
– Gross Longs:	80,557	94,313	21,817
– Gross Shorts:	80,119	79,328	37,240
– Long to Short Ratio:	1.0 to 1	1.2 to 1	0.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	36.3	67.3	29.8
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-8.5	9.5	-10.7

Japanese Yen Futures:

The Japanese Yen large speculator standing this week resulted in a net position of -29,411 contracts in the data reported through Tuesday. This was a weekly decrease of -9,222 contracts from the previous week which had a total of -20,189 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 61.9 percent. The commercials are Bearish with a score of 39.9 percent and the small traders (not shown in chart) are Bullish with a score of 59.8 percent.

Price Trend-Following Model: Downtrend

Our weekly trend-following model classifies the current market price position as: Downtrend.

JAPANESE YEN Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	40.8	39.3	18.0
– Percent of Open Interest Shorts:	54.0	25.5	18.7
– Net Position:	-29,411	31,023	-1,612
– Gross Longs:	91,434	88,113	40,268
– Gross Shorts:	120,845	57,090	41,880
– Long to Short Ratio:	0.8 to 1	1.5 to 1	1.0 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	61.9	39.9	59.8
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-12.7	11.5	1.4

Swiss Franc Futures:

The Swiss Franc large speculator standing this week resulted in a net position of -38,701 contracts in the data reported through Tuesday. This was a weekly decline of -813 contracts from the previous week which had a total of -37,888 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 22.5 percent. The commercials are Bullish-Extreme with a score of 91.3 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 4.0 percent.

Price Trend-Following Model: Strong Downtrend

Our weekly trend-following model classifies the current market price position as: Strong Downtrend.

SWISS FRANC Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	8.0	83.7	7.8
– Percent of Open Interest Shorts:	49.2	23.8	26.5
– Net Position:	-38,701	56,343	-17,642
– Gross Longs:	7,557	78,690	7,316
– Gross Shorts:	46,258	22,347	24,958
– Long to Short Ratio:	0.2 to 1	3.5 to 1	0.3 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	22.5	91.3	4.0
– Strength Index Reading (3 Year Range):	Bearish	Bullish-Extreme	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	4.8	4.9	-22.8

Canadian Dollar Futures:

The Canadian Dollar large speculator standing this week resulted in a net position of -167,153 contracts in the data reported through Tuesday. This was a weekly lift of 11,436 contracts from the previous week which had a total of -178,589 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 13.0 percent. The commercials are Bullish-Extreme with a score of 90.8 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 0.1 percent.

Price Trend-Following Model: Downtrend

Our weekly trend-following model classifies the current market price position as: Downtrend.

CANADIAN DOLLAR Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	6.6	83.6	7.9
– Percent of Open Interest Shorts:	54.3	31.8	11.9
– Net Position:	-167,153	181,481	-14,328
– Gross Longs:	23,031	292,957	27,533
– Gross Shorts:	190,184	111,476	41,861
– Long to Short Ratio:	0.1 to 1	2.6 to 1	0.7 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	13.0	90.8	0.1
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-3.5	6.6	-21.6

Australian Dollar Futures:

The Australian Dollar large speculator standing this week resulted in a net position of -77,631 contracts in the data reported through Tuesday. This was a weekly decline of -4,198 contracts from the previous week which had a total of -73,433 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 21.2 percent. The commercials are Bullish-Extreme with a score of 82.0 percent and the small traders (not shown in chart) are Bearish with a score of 23.6 percent.

Price Trend-Following Model: Downtrend

Our weekly trend-following model classifies the current market price position as: Downtrend.

AUSTRALIAN DOLLAR Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	13.6	69.9	12.1
– Percent of Open Interest Shorts:	54.0	24.4	17.2
– Net Position:	-77,631	87,297	-9,666
– Gross Longs:	26,135	134,239	23,314
– Gross Shorts:	103,766	46,942	32,980
– Long to Short Ratio:	0.3 to 1	2.9 to 1	0.7 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	21.2	82.0	23.6
– Strength Index Reading (3 Year Range):	Bearish	Bullish-Extreme	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-70.3	65.3	-27.8

New Zealand Dollar Futures:

The New Zealand Dollar large speculator standing this week resulted in a net position of -52,089 contracts in the data reported through Tuesday. This was a weekly advance of 2,535 contracts from the previous week which had a total of -54,624 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 3.0 percent. The commercials are Bullish-Extreme with a score of 97.2 percent and the small traders (not shown in chart) are Bearish with a score of 20.9 percent.

Price Trend-Following Model: Downtrend

Our weekly trend-following model classifies the current market price position as: Downtrend.

NEW ZEALAND DOLLAR Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	11.9	83.8	3.9
– Percent of Open Interest Shorts:	68.4	24.4	6.7
– Net Position:	-52,089	54,644	-2,555
– Gross Longs:	10,921	77,144	3,632
– Gross Shorts:	63,010	22,500	6,187
– Long to Short Ratio:	0.2 to 1	3.4 to 1	0.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	3.0	97.2	20.9
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-33.7	33.1	-1.7

Mexican Peso Futures:

The Mexican Peso large speculator standing this week resulted in a net position of 5,997 contracts in the data reported through Tuesday. This was a weekly reduction of -6,394 contracts from the previous week which had a total of 12,391 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 31.8 percent. The commercials are Bullish with a score of 72.3 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 10.3 percent.

Price Trend-Following Model: Strong Downtrend

Our weekly trend-following model classifies the current market price position as: Strong Downtrend.

MEXICAN PESO Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	40.0	54.5	2.7
– Percent of Open Interest Shorts:	35.8	57.1	4.2
– Net Position:	5,997	-3,765	-2,232
– Gross Longs:	57,188	77,842	3,823
– Gross Shorts:	51,191	81,607	6,055
– Long to Short Ratio:	1.1 to 1	1.0 to 1	0.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	31.8	72.3	10.3
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	0.9	-1.0	0.6

Brazilian Real Futures:

The Brazilian Real large speculator standing this week resulted in a net position of -34,874 contracts in the data reported through Tuesday. This was a weekly reduction of -1,897 contracts from the previous week which had a total of -32,977 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 19.0 percent. The commercials are Bullish-Extreme with a score of 83.0 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 14.1 percent.

Price Trend-Following Model: Downtrend

Our weekly trend-following model classifies the current market price position as: Downtrend.

BRAZIL REAL Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	26.1	68.0	2.8
– Percent of Open Interest Shorts:	71.8	20.7	4.3
– Net Position:	-34,874	36,067	-1,193
– Gross Longs:	19,951	51,899	2,111
– Gross Shorts:	54,825	15,832	3,304
– Long to Short Ratio:	0.4 to 1	3.3 to 1	0.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	19.0	83.0	14.1
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-16.6	16.3	0.2

Bitcoin Futures:

The Bitcoin large speculator standing this week resulted in a net position of 1,335 contracts in the data reported through Tuesday. This was a weekly gain of 145 contracts from the previous week which had a total of 1,190 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 80.4 percent. The commercials are Bearish with a score of 25.5 percent and the small traders (not shown in chart) are Bearish with a score of 24.0 percent.

Price Trend-Following Model: Uptrend

Our weekly trend-following model classifies the current market price position as: Uptrend.

BITCOIN Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	81.7	3.7	3.7
– Percent of Open Interest Shorts:	77.9	8.0	3.2
– Net Position:	1,335	-1,520	185
– Gross Longs:	28,966	1,330	1,304
– Gross Shorts:	27,631	2,850	1,119
– Long to Short Ratio:	1.0 to 1	0.5 to 1	1.2 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	80.4	25.5	24.0
– Strength Index Reading (3 Year Range):	Bullish-Extreme	Bearish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	63.9	-63.9	-27.4

Article By InvestMacro – Receive our weekly COT Newsletter

*COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets.

The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting). See CFTC criteria here.

16 Jan

EUR/USD Stabilises as US Inflation Cools Without Major Surprises

By RoboForex Analytical Department

Following a nervous session last night, the EUR/USD pair is trading near 1.0285 on Thursday morning. The market is now stabilising.

Key developments influencing EUR/USD

US inflation data showed moderate growth, aligning with expectations. As forecast, the Consumer Price Index (CPI) rose by 0.4% m/m in December, maintaining an annualised rate of 2.9% y/y. Core CPI, excluding volatile goods, offered a slight surprise with a ‘cooling’ effect. It increased by 0.2% m/m (3.2% y/y), below the forecasted 0.3% m/m (3.3% y/y).

US Treasury yields declined, negatively impacting the USD. However, the currency market’s reaction remained subdued.

The release of inflation statistics prompted investors to modestly revise their expectations for Federal Reserve interest rate cuts in 2025. Lending costs are now expected to drop by an average of 37 basis points throughout the year.

The USD demonstrated resilience in January and performed better than in December. If this trend continues, the current week will mark the fourth consecutive week of USD strengthening.

In contrast, European statistics provided little support for the euro. Industrial production in the Eurozone rose by 0.2% m/m in November, following stagnation in October. However, year-on-year figures revealed a deeper contraction, with production falling by 1.9%.

Investors now await key US economic data, including December retail sales and weekly jobless claims, which could further influence the pair.

Technical analysis of EUR/USD

On the H4 chart, EUR/USD completed a corrective wave to 1.0350 before forming a new downward impulse to 1.0258. The current outlook suggests the potential development of a new downward wave targeting 1.0160. After reaching this level, a corrective move towards 1.0250 is likely, with a possible further decline to 1.0050. This scenario is supported by the MACD indicator, with its signal line below zero and trending downwards, indicating the likelihood of renewed lows.

On the H1 chart, the pair formed a downward impulse to 1.0258, with a correction expected to target 1.0300. Once this level is reached, the downward wave may resume, aiming for 1.0210 and potentially extending to 1.0160. The Stochastic oscillator supports this outlook, with its signal line below the 50 mark and heading towards 20, suggesting continued downward momentum.

Conclusion

EUR/USD remains under pressure as US inflation data bolstered the dollar’s resilience. While technical indicators point to further downside potential, the pair’s movements will largely depend on upcoming US retail sales and jobless claims data, as well as the overall strength of the USD. On the euro’s side, weak industrial production data highlights ongoing challenges in the eurozone, adding further weight to the bearish outlook.

Disclaimer

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15 Jan

Australian Dollar Gains, but Rate Uncertainty Limits Potential

By RoboForex Analytical Department

The AUD/USD pair climbed to 0.6192 midweek, reflecting cautious optimism in the market. Traders remain vigilant ahead of key December inflation data from the US, which could influence expectations regarding the Federal Reserve’s potential interest rate cuts in 2025. Earlier, the Australian dollar recovered some of its losses as the US dollar reacted to Producer Price Index statistics.

Key upcoming events for the AUD

Australia will release its employment report on Thursday, a critical data point for assessing the state of the labour market. These figures are crucial for adjusting forecasts concerning the Reserve Bank of Australia’s (RBA) interest rate trajectory.

Fresh Q4 2024 inflation data for Australia will also be published at the end of the month. These data will be pivotal in shaping expectations for the RBA’s upcoming meeting and its decisions on borrowing costs.

Investors currently assign a 70% probability of a rate cut at the RBA’s February meeting. If realised, the rate could decrease by 25 basis points from the current 4.35% per annum. Market prices have already factored in this potential decision.

However, lingering uncertainty about the RBA’s future policy direction and the terminal rate target for the year keeps investors cautious, limiting the AUD’s upside potential.

Technical analysis of AUD/USD

On the H4 chart, AUD/USD is developing an upward wave targeting 0.6211. This level is expected to be tested today, followed by a potential decline towards 0.6161. A consolidation range is likely to form around 0.6161. If the pair breaks upwards from this range, a correction to 0.6290 could materialise. Conversely, a downward breakout could trigger a new wave targeting 0.6116. The MACD indicator supports this scenario, with its signal line below the zero mark but pointing sharply upwards.

On the H1 chart, the pair is building a growth wave towards 0.6211, which is expected to be reached today. Following this, a corrective move to 0.6161 may occur. The Stochastic oscillator confirms this scenario, with its signal line above the 50 mark and trending upwards towards 80.

Conclusion

The Australian dollar’s recent recovery is tempered by uncertainty surrounding the RBA’s future policy decisions. Key domestic data, including employment figures and Q4 inflation, heavily influence market expectations. While technical indicators suggest short-term growth potential for AUD/USD, further gains will depend on clarity regarding the RBA’s policy trajectory and broader economic conditions.

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14 Jan

Japanese Yen in Consolidation After Recent Growth: Signs of Recovery but Insufficient Support Factors

By RoboForex Analytical Department

The USD/JPY pair entered a consolidation phase on Tuesday, following modest growth during the earlier two trading sessions. Today, the pair’s movements are centred around the 157.50 mark.

Despite these recovery attempts, the yen remains under pressure, with limited support for a sustained rebound. Comments from Ryozo Himino, Deputy Governor of the Bank of Japan (BoJ), did little to shift market sentiment. Himino indicated that the upcoming BoJ meeting would discuss the possibility of an interest rate hike. However, inflation expectations and price dynamics remain largely unchanged, influenced by both domestic and global risk factors. As a result, many market participants expect that the BoJ will maintain its current policy stance.

Some limited support for the yen has provided a temporary equilibrium, but this has not been sufficient to drive significant gains.

Externally, the US dollar continues to weigh on the yen. Signs of economic resilience in the US have led market participants to adjust their expectations about potential interest rate cuts in 2025. While the prevailing market consensus still points to two or three rate cuts next year, these adjustments are not expected in the near term, reinforcing the dollar’s strength against the yen.

Technical analysis of USD/JPY

On the H4 chart, the USD/JPY pair completed its upward move at the 158.87 level, followed by a downward impulse reaching 156.90. The current outlook suggests a potential upward correction towards 157.90. Should this level be achieved, the market could see a renewed decline towards the 156.00 mark, which is considered a local target. The MACD indicator supports this scenario, with its signal line below zero and decisively downwards.

On the H1 chart, the pair experienced a pullback from the 157.90 level, forming a downward wave. The consolidation range around 157.90 is nearly complete, with expectations of a breakout to the downside, likely to initiate a decline towards the 156.00 level. After reaching this target, a corrective move to 157.25 (as a test from below) is possible. Further downward movement towards 156.66 could follow, marking the primary target. The Stochastic oscillator corroborates this scenario, with its signal line below the 50 level and pointing sharply downwards.

Conclusion

The yen’s recent movements highlight an ongoing struggle to recover amid limited support factors and external pressures from the US dollar. The technical outlook suggests a potential short-term decline in USD/JPY, with key support levels at 156.00 and 156.66. However, the broader trend will depend on upcoming developments from the BoJ and shifts in market sentiment around US monetary policy.

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10 Jan

New Zealand dollar near two-year low: USD and China are ‘to blame’

By RoboForex Analytical Department

The NZD/USD pair has fallen to 0.5590 as of Friday, marking a two-year low driven by a strong US dollar and concerns over China’s economic performance. The decline in the New Zealand dollar comes ahead of the release of the US jobs report for December, a critical data point that will shape market expectations for the Federal Reserve’s monetary policy trajectory. Investors largely anticipate that the Fed will maintain its cautious stance on rate adjustments, lending strength to the USD while pressuring other currencies.

US factors weighing on NZD/USD

The Federal Reserve’s December meeting minutes highlighted ongoing concerns about inflation. The minutes revealed the Fed’s reluctance to implement aggressive monetary policy easing considering persistent inflation risks. Adding to this cautious approach are fears that US President-elect Donald Trump’s proposed tariff policies could soon exacerbate inflationary pressures. As a result, the Fed is unlikely to ease monetary conditions quickly or extensively, providing robust support for the US dollar.

China’s economic challenges impacting the NZD

Weak inflation data from China, New Zealand’s largest trading partner, adds to the NZD’s troubles. The subdued inflation figures point to waning domestic demand in China, a worrying signal for global trade-dependent economies like New Zealand. Weak Chinese demand for goods and commodities directly threatens New Zealand’s exports, further pressuring the NZD/USD pair.

New Zealand’s domestic struggles

Domestically, New Zealand is grappling with a deep recession driving expectations of further monetary easing. The Reserve Bank of New Zealand (RBNZ) will meet in February, and the baseline scenario points to another 50-basis-point rate cut, reducing the official cash rate from the current 4.25% to 3.75%. By the end of 2025, the rate could decline to around 3.00% as the RBNZ seeks to support the struggling economy with more affordable credit.

To sum up, rising recessionary pressures, weak domestic demand, and limited external demand from China paint a challenging picture for the New Zealand dollar.

Technical analysis of NZD/USD

On the H4 chart, the NZD/USD continues its downward trajectory after breaking below the critical level of 0.5785. The market has formed a consolidation range around 0.5612, likely to resolve with a bearish breakout. The next target lies at 0.5530, where a brief correction to retest the 0.5612 level (from below) is possible. A sustained break below 0.5530 could pave the way for an extended decline towards 0.5200, the primary target for the ongoing downtrend.

This scenario is supported by the MACD indicator, with its signal line positioned below the zero mark and pointing downward, indicating strong bearish momentum.

On the H1 chart, the market shows a consolidation range around 0.5612, signalling indecision. However, a downward breakout is expected, paving the way for a continued drop to 0.5530. Following this, a corrective wave back to 0.5612 is possible before the pair resumes its descent toward 0.5200.

The Stochastic oscillator supports this outlook, with its signal line hovering near the 20 level. This reflects intense downside pressure and validates the continuation of the bearish trend.

Broader outlook

The outlook for NZD/USD remains bearish, driven by both domestic and global factors. The Fed’s cautious approach, coupled with a robust US dollar and weak Chinese demand, presents formidable challenges for the NZD. Domestically, New Zealand’s recessionary pressures and anticipated rate cuts by the RBNZ are likely to keep the currency under sustained pressure.

Unless there is a significant reversal in China’s economic conditions or a shift in the Federal Reserve’s policy stance, the NZD/USD pair is expected to remain downward, with 0.5200 emerging as a key level to watch.

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09 Jan

The Yen Nears a Six-Month Low, Affected by the Strong US Dollar

By RoboForex Analytical Department

The USD/JPY pair remained near the 158.00 mark on Thursday, consolidating at levels last seen in mid-2024. Although the pair is no longer surging as it did earlier in the year, the fundamental preconditions for further growth persist.

The yen continues to face significant downward pressure due to the strength of the US dollar. The greenback is buoyed by hawkish signals from the US Federal Reserve, reinforcing expectations of a measured pace of rate cuts in 2025. The US dollar’s rally is further bolstered by renewed market concerns over tariff threats from US President-elect Donald Trump, adding to its safe-haven appeal.

Domestic data weighs on the yen

Japan’s domestic economic landscape is also contributing to the yen’s weakness. Fresh data showed that real wages in Japan fell by 0.3% year-on-year in November, marking the fourth consecutive month of declines. This wage downturn reflects ongoing challenges in the labour market and erodes consumer spending power, which is critical for economic recovery.

Adding to these woes, consumer sentiment in Japan deteriorated further in December, highlighting public concerns about economic stability. These signals make the likelihood of an interest rate hike by the Bank of Japan (BoJ) increasingly remote. The BoJ has maintained an accommodative monetary policy stance for years, and this latest data reinforces its reticence to tighten monetary conditions.

Japan’s Finance Minister, Katsunobu Kato, reiterated this week the government’s readiness to intervene in currency markets should speculative, one-way moves in the yen persist. While such statements underline the government’s concerns about volatility, they have become a familiar refrain, offering little immediate support for the currency.

Since 4 December 2024, the yen has been in an active weakening phase, and there is little indication that this trend is nearing completion.

Technical analysis of USD/JPY

On the H4 chart, the USD/JPY pair has formed a broad consolidation range around the 157.33 level. This range is expanding upwards, with the market targeting the 158.63 level as its primary objective. After reaching this target, a corrective wave to the 156.00 level could materialise. The MACD indicator supports this outlook, with its signal line positioned above the zero mark and pointing sharply upwards, indicating sustained bullish momentum.

The H1 chart shows the USD/JPY market amid a growth wave targeting 158.63. A consolidation range is forming around the 157.33 level, with an intermediate target at 158.40 already being worked out through an upward breakout. A minor correction back to 157.33 (testing the level from above) is possible. Upon completing this correction, the pair is expected to resume its upward movement towards the 158.63 level, the primary target for the current wave.

The Stochastic oscillator confirms this scenario, with its signal line positioned above the 50 mark and pointing decisively upwards, indicating bullish momentum remains intact.

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22 Dec

US Dollar Index Speculator bets rise for 1st time in 7 weeks, AUD bets plunge

By InvestMacro

Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC).

The latest COT data is updated through Tuesday December 17th and shows a quick view of how large market participants (for-profit speculators and commercial traders) were positioned in the futures markets. All currency positions are in direct relation to the US dollar where, for example, a bet for the euro is a bet that the euro will rise versus the dollar while a bet against the euro will be a bet that the euro will decline versus the dollar.

Weekly Speculator Bets led by Swiss Franc & EuroFX

The COT currency market speculator bets were overall lower this week as five out of the eleven currency markets we cover had higher positioning while the other six markets had lower speculator contracts.

Leading the gains for the currency markets was the Swiss Franc (13,192 contracts) with the EuroFX (9,678 contracts), the US Dollar Index (8,865 contracts), the Mexican Peso (6,686 contracts) and Bitcoin (891 contracts) also having positive weeks.

The currencies seeing declines in speculator bets on the week were the Australian Dollar (-70,016 contracts), the Japanese Yen (-19,791 contracts), the New Zealand Dollar (-14,300 contracts), the British Pound (-5,478 contracts), the Brazilian Real (-4,544 contracts) and with the Canadian Dollar (-501 contracts) also recording lower bets on the week.

US Dollar Index Speculator bets rise for 1st time in 7 weeks, AUD bets plunge

Highlighting the COT currency’s data this week is the increase in the speculator’s positioning in the US Dollar Index. The large speculative US Dollar Index positions jumped this week for the first time in the past seven weeks and by the highest weekly amount (+8,865 contracts) since June.

The Dollar Index bets had fallen for seven straight weeks and spec positions were in bearish territory for the past five weeks before this week’s gain. Now, the Dollar Index is back in a bullish standing and at the highest level since September. Speculators had been cutting their bullish bets despite the strong buying action in the markets for the Dollar.

The Dollar Index futures (DX) rose again this week for a third consecutive week and have now been higher in ten out of the past twelve weeks. This week’s high level over 108 is the highest point touched since 2022 and the DX managed to close over the 107.00 level for the first time since November.

Australian dollar bets plunge

The Australian dollar speculator positions fell by the most on record this week with a huge drop by -70,016 contracts. This surpasses the previous most bearish weekly plunge of -56,065 contracts that took place in 2007 around the time of the Great Financial Crisis.

The Australian Dollar exchange versus the US Dollar has been falling sharply with declines in eleven out of the past twelve weeks as well. The AUD exchange level closed at 0.6267 on Friday, marking the lowest close since the fourth quarter of 2022.

The strong Dollar has been laying waste to most of the other major currencies as the Euro, Canadian dollar, Australian dollar, New Zealand dollar, Mexican peso and the Brazilian real are all trading at or near multi-year lows.

Currencies Net Speculators Leaderboard

Legend: Weekly Speculators Change | Speculators Current Net Position | Speculators Strength Score compared to last 3-Years (0-100 range)

Strength Scores led by Japanese Yen & Swiss Franc

COT Strength Scores (a normalized measure of Speculator positions over a 3-Year range, from 0 to 100 where above 80 is Extreme-Bullish and below 20 is Extreme-Bearish) showed that the Japanese Yen (76 percent) and the Swiss Franc (57 percent) lead the currency markets this week. Bitcoin (55 percent) comes in as the next highest in the weekly strength scores.

On the downside, the New Zealand Dollar (0 percent), the EuroFX (4 percent), the Canadian Dollar (6 percent) and the US Dollar Index (18 percent) come in at the lowest strength levels currently and are in Extreme-Bearish territory (below 20 percent).

3-Year Strength Statistics:
US Dollar Index (18.4 percent) vs US Dollar Index previous week (0.0 percent)
EuroFX (3.7 percent) vs EuroFX previous week (0.0 percent)
British Pound Sterling (45.8 percent) vs British Pound Sterling previous week (48.3 percent)
Japanese Yen (76.0 percent) vs Japanese Yen previous week (83.9 percent)
Swiss Franc (56.7 percent) vs Swiss Franc previous week (30.0 percent)
Canadian Dollar (6.4 percent) vs Canadian Dollar previous week (6.6 percent)
Australian Dollar (32.6 percent) vs Australian Dollar previous week (82.3 percent)
New Zealand Dollar (0.0 percent) vs New Zealand Dollar previous week (19.5 percent)
Mexican Peso (36.2 percent) vs Mexican Peso previous week (32.8 percent)
Brazilian Real (32.2 percent) vs Brazilian Real previous week (36.5 percent)
Bitcoin (55.0 percent) vs Bitcoin previous week (35.6 percent)

Bitcoin & Japanese Yen top the 6-Week Strength Trends

COT Strength Score Trends (or move index, calculates the 6-week changes in strength scores) showed that Bitcoin (36 percent) and the Japanese Yen (20 percent) lead the past six weeks trends for the currencies. The Swiss Franc (17 percent) and the US Dollar Index (11 percent) are the next highest positive movers in the 3-Year trends data.

The Australian Dollar (-66 percent) leads the downside trend scores currently with the New Zealand Dollar (-47 percent), EuroFX (-17 percent) and the British Pound (-11 percent) following next with lower trend scores.

3-Year Strength Trends:
US Dollar Index (11.5 percent) vs US Dollar Index previous week (-10.2 percent)
EuroFX (-16.8 percent) vs EuroFX previous week (-9.6 percent)
British Pound Sterling (-10.5 percent) vs British Pound Sterling previous week (-17.6 percent)
Japanese Yen (20.0 percent) vs Japanese Yen previous week (20.2 percent)
Swiss Franc (16.6 percent) vs Swiss Franc previous week (-2.0 percent)
Canadian Dollar (-3.1 percent) vs Canadian Dollar previous week (-6.3 percent)
Australian Dollar (-65.6 percent) vs Australian Dollar previous week (-13.5 percent)
New Zealand Dollar (-46.8 percent) vs New Zealand Dollar previous week (-35.5 percent)
Mexican Peso (-8.4 percent) vs Mexican Peso previous week (-13.8 percent)
Brazilian Real (-8.0 percent) vs Brazilian Real previous week (-11.5 percent)
Bitcoin (35.5 percent) vs Bitcoin previous week (25.1 percent)

Individual COT Forex Markets:

US Dollar Index Futures:

The US Dollar Index large speculator standing this week recorded a net position of 5,641 contracts in the data reported through Tuesday. This was a weekly rise of 8,865 contracts from the previous week which had a total of -3,224 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 18.4 percent. The commercials are Bullish with a score of 79.6 percent and the small traders (not shown in chart) are Bearish with a score of 41.3 percent.

Price Trend-Following Model: Strong Uptrend

Our weekly trend-following model classifies the current market price position as: Strong Uptrend.

US DOLLAR INDEX Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	60.9	25.1	9.1
– Percent of Open Interest Shorts:	47.2	42.9	5.0
– Net Position:	5,641	-7,349	1,708
– Gross Longs:	25,145	10,353	3,753
– Gross Shorts:	19,504	17,702	2,045
– Long to Short Ratio:	1.3 to 1	0.6 to 1	1.8 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	18.4	79.6	41.3
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	11.5	-14.4	18.4

Euro Currency Futures:

The Euro Currency large speculator standing this week recorded a net position of -65,895 contracts in the data reported through Tuesday. This was a weekly increase of 9,678 contracts from the previous week which had a total of -75,573 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 3.7 percent. The commercials are Bullish-Extreme with a score of 97.7 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 10.6 percent.

Price Trend-Following Model: Strong Downtrend

Our weekly trend-following model classifies the current market price position as: Strong Downtrend.

EURO Currency Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	26.1	58.4	12.3
– Percent of Open Interest Shorts:	37.4	50.1	9.3
– Net Position:	-65,895	48,089	17,806
– Gross Longs:	152,671	340,837	72,006
– Gross Shorts:	218,566	292,748	54,200
– Long to Short Ratio:	0.7 to 1	1.2 to 1	1.3 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	3.7	97.7	10.6
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-16.8	16.2	-7.4

British Pound Sterling Futures:

The British Pound Sterling large speculator standing this week recorded a net position of 21,647 contracts in the data reported through Tuesday. This was a weekly reduction of -5,478 contracts from the previous week which had a total of 27,125 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 45.8 percent. The commercials are Bullish with a score of 54.9 percent and the small traders (not shown in chart) are Bullish with a score of 50.9 percent.

Price Trend-Following Model: Strong Downtrend

Our weekly trend-following model classifies the current market price position as: Strong Downtrend.

BRITISH POUND Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	47.2	38.3	13.3
– Percent of Open Interest Shorts:	35.6	47.0	16.2
– Net Position:	21,647	-16,258	-5,389
– Gross Longs:	88,265	71,728	24,964
– Gross Shorts:	66,618	87,986	30,353
– Long to Short Ratio:	1.3 to 1	0.8 to 1	0.8 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	45.8	54.9	50.9
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-10.5	15.6	-33.4

Japanese Yen Futures:

The Japanese Yen large speculator standing this week recorded a net position of 5,961 contracts in the data reported through Tuesday. This was a weekly decline of -19,791 contracts from the previous week which had a total of 25,752 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 76.0 percent. The commercials are Bearish with a score of 27.4 percent and the small traders (not shown in chart) are Bullish with a score of 56.8 percent.

Price Trend-Following Model: Strong Downtrend

Our weekly trend-following model classifies the current market price position as: Strong Downtrend.

JAPANESE YEN Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	48.0	31.4	19.1
– Percent of Open Interest Shorts:	44.7	33.1	20.7
– Net Position:	5,961	-3,101	-2,860
– Gross Longs:	87,208	57,107	34,688
– Gross Shorts:	81,247	60,208	37,548
– Long to Short Ratio:	1.1 to 1	0.9 to 1	0.9 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	76.0	27.4	56.8
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	20.0	-18.5	0.6

Swiss Franc Futures:

The Swiss Franc large speculator standing this week recorded a net position of -21,800 contracts in the data reported through Tuesday. This was a weekly advance of 13,192 contracts from the previous week which had a total of -34,992 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 56.7 percent. The commercials are Bullish with a score of 65.3 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 0.0 percent.

Price Trend-Following Model: Strong Downtrend

Our weekly trend-following model classifies the current market price position as: Strong Downtrend.

SWISS FRANC Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	19.7	71.7	8.0
– Percent of Open Interest Shorts:	45.2	24.6	29.7
– Net Position:	-21,800	40,379	-18,579
– Gross Longs:	16,872	61,407	6,853
– Gross Shorts:	38,672	21,028	25,432
– Long to Short Ratio:	0.4 to 1	2.9 to 1	0.3 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	56.7	65.3	0.0
– Strength Index Reading (3 Year Range):	Bullish	Bullish	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	16.6	1.4	-38.3

Canadian Dollar Futures:

The Canadian Dollar large speculator standing this week recorded a net position of -182,055 contracts in the data reported through Tuesday. This was a weekly reduction of -501 contracts from the previous week which had a total of -181,554 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 6.4 percent. The commercials are Bullish-Extreme with a score of 96.6 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 2.6 percent.

Price Trend-Following Model: Strong Downtrend

Our weekly trend-following model classifies the current market price position as: Strong Downtrend.

CANADIAN DOLLAR Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	3.9	88.8	5.9
– Percent of Open Interest Shorts:	41.4	48.5	8.7
– Net Position:	-182,055	195,457	-13,402
– Gross Longs:	19,170	430,972	28,710
– Gross Shorts:	201,225	235,515	42,112
– Long to Short Ratio:	0.1 to 1	1.8 to 1	0.7 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	6.4	96.6	2.6
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-3.1	6.0	-20.4

Australian Dollar Futures:

The Australian Dollar large speculator standing this week recorded a net position of -61,531 contracts in the data reported through Tuesday. This was a weekly decrease of -70,016 contracts from the previous week which had a total of 8,485 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 32.6 percent. The commercials are Bullish with a score of 72.3 percent and the small traders (not shown in chart) are Bearish with a score of 23.9 percent.

Price Trend-Following Model: Strong Downtrend

Our weekly trend-following model classifies the current market price position as: Strong Downtrend.

AUSTRALIAN DOLLAR Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	19.1	64.4	12.7
– Percent of Open Interest Shorts:	54.7	23.3	18.3
– Net Position:	-61,531	71,099	-9,568
– Gross Longs:	32,929	111,276	21,997
– Gross Shorts:	94,460	40,177	31,565
– Long to Short Ratio:	0.3 to 1	2.8 to 1	0.7 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	32.6	72.3	23.9
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-65.6	61.3	-27.3

New Zealand Dollar Futures:

The New Zealand Dollar large speculator standing this week recorded a net position of -42,507 contracts in the data reported through Tuesday. This was a weekly reduction of -14,300 contracts from the previous week which had a total of -28,207 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 0.0 percent. The commercials are Bullish-Extreme with a score of 100.0 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 4.9 percent.

Price Trend-Following Model: Strong Downtrend

Our weekly trend-following model classifies the current market price position as: Strong Downtrend.

NEW ZEALAND DOLLAR Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	11.6	84.1	3.7
– Percent of Open Interest Shorts:	64.0	26.9	8.4
– Net Position:	-42,507	46,323	-3,816
– Gross Longs:	9,370	68,108	2,967
– Gross Shorts:	51,877	21,785	6,783
– Long to Short Ratio:	0.2 to 1	3.1 to 1	0.4 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	0.0	100.0	4.9
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-46.8	47.8	-30.5

Mexican Peso Futures:

The Mexican Peso large speculator standing this week recorded a net position of 14,614 contracts in the data reported through Tuesday. This was a weekly rise of 6,686 contracts from the previous week which had a total of 7,928 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 36.2 percent. The commercials are Bullish with a score of 67.9 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 10.1 percent.

Price Trend-Following Model: Downtrend

Our weekly trend-following model classifies the current market price position as: Downtrend.

MEXICAN PESO Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	43.8	50.3	2.9
– Percent of Open Interest Shorts:	32.2	60.1	4.7
– Net Position:	14,614	-12,332	-2,282
– Gross Longs:	55,529	63,901	3,680
– Gross Shorts:	40,915	76,233	5,962
– Long to Short Ratio:	1.4 to 1	0.8 to 1	0.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	36.2	67.9	10.1
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-8.4	7.5	10.1

Brazilian Real Futures:

The Brazilian Real large speculator standing this week recorded a net position of -20,937 contracts in the data reported through Tuesday. This was a weekly decrease of -4,544 contracts from the previous week which had a total of -16,393 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 32.2 percent. The commercials are Bullish with a score of 70.1 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 13.1 percent.

Price Trend-Following Model: Strong Downtrend

Our weekly trend-following model classifies the current market price position as: Strong Downtrend.

BRAZIL REAL Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	41.0	55.6	2.7
– Percent of Open Interest Shorts:	67.8	26.9	4.5
– Net Position:	-20,937	22,320	-1,383
– Gross Longs:	31,931	43,312	2,103
– Gross Shorts:	52,868	20,992	3,486
– Long to Short Ratio:	0.6 to 1	2.1 to 1	0.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	32.2	70.1	13.1
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-8.0	8.4	-3.0

Bitcoin Futures:

The Bitcoin large speculator standing this week recorded a net position of 171 contracts in the data reported through Tuesday. This was a weekly boost of 891 contracts from the previous week which had a total of -720 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 55.0 percent. The commercials are Bullish with a score of 51.4 percent and the small traders (not shown in chart) are Bearish with a score of 33.4 percent.

Price Trend-Following Model: Uptrend

Our weekly trend-following model classifies the current market price position as: Uptrend.

BITCOIN Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	77.8	4.0	3.9
– Percent of Open Interest Shorts:	77.4	5.2	3.1
– Net Position:	171	-483	312
– Gross Longs:	33,073	1,720	1,639
– Gross Shorts:	32,902	2,203	1,327
– Long to Short Ratio:	1.0 to 1	0.8 to 1	1.2 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	55.0	51.4	33.4
– Strength Index Reading (3 Year Range):	Bullish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	35.5	-35.2	-16.2

Article By InvestMacro – Receive our weekly COT Newsletter

COT Updates Forex and Currency News Opinions

21 Dec

Speculator Extremes: New Zealand Dollar, Euro & CAD lead Bearish Positions

By InvestMacro

The latest update for the weekly Commitment of Traders (COT) report was released by the Commodity Futures Trading Commission (CFTC) on Friday for data ending on December 17th.

This weekly Extreme Positions report highlights the Most Bullish and Most Bearish Positions for the speculator category. Extreme positioning in these markets can foreshadow strong moves in the underlying market.

To signify an extreme position, we use the Strength Index (also known as the COT Index) of each instrument, a common method of measuring COT data. The Strength Index is simply a comparison of current trader positions against the range of positions over the previous 3 years. We use over 80 percent as extremely bullish and under 20 percent as extremely bearish. (Compare Strength Index scores across all markets in the data table or cot leaders table)

Here Are This Week’s Most Bullish Speculator Positions:

Lean Hogs

The Lean Hogs speculator position comes in as the most bullish extreme standing this week. The Lean Hogs speculator level is currently at a 100.0 percent score of its 3-year range.

The six-week trend for the percent strength score totaled 17.0 this week. The overall net speculator position was a total of 93,410 net contracts this week with a rise of 1,888 contract in the weekly speculator bets.

Speculators or Non-Commercials Notes:
Speculators, classified as non-commercial traders by the CFTC, are made up of large commodity funds, hedge funds and other significant for-profit participants. The Specs are generally regarded as trend-followers in their behavior towards price action – net speculator bets and prices tend to go in the same directions. These traders often look to buy when prices are rising and sell when prices are falling. To illustrate this point, many times speculator contracts can be found at their most extremes (bullish or bearish) when prices are also close to their highest or lowest levels.
These extreme levels can be dangerous for the large speculators as the trade is most crowded, there is less trading ammunition still sitting on the sidelines to push the trend further and prices have moved a significant distance. When the trend becomes exhausted, some speculators take profits while others look to also exit positions when prices fail to continue in the same direction. This process usually plays out over many months to years and can ultimately create a reverse effect where prices start to fall and speculators start a process of selling when prices are falling.

Live Cattle

The Live Cattle speculator position comes next in the extreme standings this week. The Live Cattle speculator level is now at a 98.4 percent score of its 3-year range.

The six-week trend for the percent strength score was 34.5 this week. The speculator position registered 110,778 net contracts this week with a weekly gain by 8,077 contracts in speculator bets.

Nasdaq

The Nasdaq speculator position comes in third this week in the extreme standings. The Nasdaq speculator level resides at a 95.1 percent score of its 3-year range.

The six-week trend for the speculator strength score came in at 31.0 this week. The overall speculator position was 36,082 net contracts this week with an increase by 509 contracts in the weekly speculator bets.

Ultra U.S. Treasury Bonds

The Ultra U.S. Treasury Bonds speculator position comes up number four in the extreme standings this week. The Ultra U.S. Treasury Bonds speculator level is at a 90.6 percent score of its 3-year range.

The six-week trend for the speculator strength score totaled a change of 17.2 this week. The overall speculator position was -219,304 net contracts this week with a change of -2,932 contracts in the speculator bets.

Coffee

The Coffee speculator position rounds out the top five in this week’s bullish extreme standings. The Coffee speculator level sits at a 86.5 percent score of its 3-year range. The six-week trend for the speculator strength score was -0.8 this week.

The speculator position was 62,147 net contracts this week with an edge higher by 73 contracts in the weekly speculator bets.

This Week’s Most Bearish Speculator Positions:

New Zealand Dollar

The New Zealand Dollar speculator position comes in as the most bearish extreme standing this week. The New Zealand Dollar speculator level is at a 0.0 percent score of its 3-year range.

The six-week trend for the speculator strength score was -46.8 this week. The overall speculator position was -42,507 net contracts this week with a drop by -14,300 contracts in the speculator bets.

Euro

The Euro speculator position comes in next for the most bearish extreme standing on the week. The Euro speculator level is at a 3.7 percent score of its 3-year range.

The six-week trend for the speculator strength score was -16.8 this week. The speculator position was -65,895 net contracts this week with a rise of 9,678 contracts in the weekly speculator bets.

Canadian Dollar

The Canadian Dollar speculator position comes in as third most bearish extreme standing of the week. The Canadian Dollar speculator level resides at a 6.4 percent score of its 3-year range.

The six-week trend for the speculator strength score was -3.1 this week. The overall speculator position was -182,055 net contracts this week with a dip of -501 contracts in the speculator bets.

Soybean Meal

The Soybean Meal speculator position comes in as this week’s fourth most bearish extreme standing. The Soybean Meal speculator level is at a 9.0 percent score of its 3-year range.

The six-week trend for the speculator strength score was -24.3 this week. The speculator position was -44,844 net contracts this week with a decline by -15,616 contracts in the weekly speculator bets.

5-Year Bond

Finally, the 5-Year Bond speculator position comes in as the fifth most bearish extreme standing for this week. The 5-Year Bond speculator level is at a 11.7 percent score of its 3-year range.

The six-week trend for the speculator strength score was 0.3 this week. The speculator position was -1,762,317 net contracts this week with a rise of 28,113 contracts in the weekly speculator bets.

Article By InvestMacro – Receive our weekly COT Newsletter

COT Updates Forex and Currency News Opinions

20 Dec

Brent Oil Under Pressure Again: USD and China in Focus

By RoboForex Analytical Department

Brent crude oil prices fell below 73 USD per barrel on Friday, reflecting ongoing downward pressure. The market is poised to close the week with losses as a robust US dollar weighs heavily on commodity prices.

This week, the US Federal Reserve signalled a measured approach to reducing borrowing costs in 2025, sending the US dollar to a two-year high. The dollar’s strength has raised concerns about a dampened outlook for global fuel demand, particularly in emerging markets where dollar-denominated commodities become more expensive.

Concerns from China add to market anxiety

The ongoing unease about China’s economic recovery adds to the bearish sentiment. Sinopec, the country’s largest refiner, announced that domestic petrol demand likely peaked last year. This revelation has significantly clouded the outlook for 2025 as China’s role as a key driver of global energy consumption diminishes. China’s reduced demand has cast a long shadow over global crude markets, leading to further downward price pressures.

Mixed signals from supply dynamics

Despite the weak demand signals, the supply side has provided mixed indicators. Earlier in the week, data from the US Department of Energy showed reduced oil reserves, temporarily bolstering prices. However, this bullish factor was short-lived. Kazakhstan’s decision to support the extended production cuts under OPEC+ was another potentially supportive signal, but it has failed to provide sustained relief to oil prices amid broader concerns.

The structural expansion of production outside OPEC, particularly in the US and other non-OPEC nations, further complicates the outlook. Combined with China’s declining appetite for energy, these factors suggest that oil prices may end 2024 on a subdued note, with limited prospects for a significant recovery.

Technical analysis of Brent oil

H4 chart analysis: on the H4 timeframe, Brent continues to trade within a broad consolidation range around the 73.13 USD level. The market recently extended this range upwards to 73.40 USD. However, a downward move to 71.93 USD appears imminent. If the market manages to break out of this range to the upside, the next target lies at 75.05 USD, with the potential for further gains towards the 80.00 USD level.

From a technical standpoint, the MACD indicator supports this scenario, with the signal line positioned below the zero level near recent lows. This indicates that the market could soon attempt a reversal towards higher levels, potentially marking the beginning of a new growth wave.

H1 chart analysis: on the H1 chart, Brent is also consolidating around 73.13 USD. The current wave structure suggests a decline towards 71.93 USD, followed by an expected corrective wave to return to 73.13 USD. If this resistance is breached, the market may gain momentum, with an upward trajectory targeting 75.05 USD and potentially higher levels.

Disclaimer

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