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Currency Speculator raised their bets for Canadian & Australian Dollars

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 June 25th 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 Canadian & Australian Dollars

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

Leading the gains for the currency markets was the Canadian Dollar (25,519 contracts) with the Australian Dollar (17,980 contracts), the Mexican Peso (7,552 contracts), the New Zealand Dollar (6,313 contracts), the Swiss Franc (2,333 contracts) and with Bitcoin (99 contracts) also showing positive weeks.

The currencies seeing declines in speculator bets on the week were the Japanese Yen (-26,147 contracts), the EuroFX (-16,382 contracts), the British Pound (-3,573 contracts), the Brazilian Real (-2,563 contracts) and with the US Dollar Index (-73 contracts) also registering lower bets on the week.

COT Currency Roundup:

The Canadian dollar speculative position jumped by over +25,000 contracts this week but this was following three straight weeks of declines that had brought the overall position to an all-time record low level. The CAD position has fallen for 13 out of the past 17 weeks and dropped to a record bearish level on June 18th at a total of -147,931 contracts. This week’s speculator position settled at a total of -122,412 contracts. Helping keep the pressure on the Canadian dollar (also called the loonie) recently was the Bank of Canada’s decision to lower their interest rate on June 5th to 4.75 percent from the previous 5 percent. With inflation subsiding in the Canadian economy, there is speculation that interest rates will come down as well and in turn, dampen the perceived attractiveness of the loonie versus other major currencies.

The Japanese yen speculator contracts continued to drop this week and have fallen for three straight weeks. The yen speculative positioning has also declined in 13 out of the last 20 weeks as the overall bearish position has now been above -100,000 contracts for twenty consecutive weeks. The US Dollar/Japanese yen exchange rate continues to see Dollar strength (vs the yen) as the USDJPY currency pair touched above the 161.00 level this week – marking the highest level for the USD since the late-1980s.

The euro currency contracts flipped back into negative territory this week and are in a small bearish position for the first time since April 30th. The euro speculator bets have declined for three straight weeks and are standing at a total of -8,431 contracts this week. The euro exchange rate versus the US Dollar (EURUSD currency pair) has had a very subdued year so far with a fluctuation between approximately 1.0650 and 1.1000 since the beginning of January. This week the EURUSD closed at 1.0752.

The Australian dollar speculator position sharply rose for a second straight week this week with a gain of +17,980 contracts following last week’s +23,129 contract rise. The Aussie spec position has seen a marked improvement since hitting an all-time low on March 19th at -107,538 contracts with this week’s standing coming in at -23,676 contracts. This is the least bearish level since June 29th of 2021, almost exactly three years ago.

The large speculative US Dollar Index positions dipped very slightly this week by just -73 contracts. However, the Dollar Index speculative position has been on quite a run with gains in the previous eleven straight weeks. This improved sentiment brought the spec position from out of bearish territory to the highest level since December of 2023 above +17,000 contracts and near where the speculator position currently sits at +17,522 contracts. The Dollar Index price has also been on the upswing with gains in four straight weeks and closed out this week at the 105.50 level.

Finally, the large speculative New Zealand Dollar currency positions gained this week by over +6,000 net contracts. The NZD net positions have now increased for six consecutive weeks – adding a total of +37,842 contracts to the net position in that time. This improvement has taken the NZD spec contracts to the most bullish level in the past three hundred and twenty-three weeks, dating back to April 17th of 2018.

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 Australian & New Zealand Dollars

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 Australian Dollar (100 percent) and the New Zealand Dollar (100 percent) lead the currency markets this week. The British Pound (82 percent), the Mexican Peso (60 percent) and Bitcoin (57 percent) come in as the next highest in the weekly strength scores.

On the downside, the Japanese Yen (4 percent), the Canadian Dollar (14 percent), the EuroFX (17 percent), the Brazilian Real (18 percent) and the Swiss Franc (19 percent) come in at the lowest strength levels currently and are in Extreme-Bearish territory (below 20 percent).

Strength Statistics:
US Dollar Index (41.4 percent) vs US Dollar Index previous week (41.6 percent)
EuroFX (16.7 percent) vs EuroFX previous week (23.7 percent)
British Pound Sterling (82.5 percent) vs British Pound Sterling previous week (84.9 percent)
Japanese Yen (3.8 percent) vs Japanese Yen previous week (20.1 percent)
Swiss Franc (19.1 percent) vs Swiss Franc previous week (15.0 percent)
Canadian Dollar (13.5 percent) vs Canadian Dollar previous week (0.0 percent)
Australian Dollar (100.0 percent) vs Australian Dollar previous week (78.6 percent)
New Zealand Dollar (100.0 percent) vs New Zealand Dollar previous week (86.8 percent)
Mexican Peso (59.8 percent) vs Mexican Peso previous week (56.1 percent)
Brazilian Real (18.0 percent) vs Brazilian Real previous week (20.8 percent)
Bitcoin (57.0 percent) vs Bitcoin previous week (55.5 percent)

New Zealand Dollar & Australian Dollar top the 6-Week Strength Trends

COT Strength Score Trends (or move index, calculates the 6-week changes in strength scores) showed that the New Zealand Dollar (79 percent) and the Australian Dollar (64 percent) lead the past six weeks trends for the currencies. The British Pound (43 percent), the US Dollar Index (32 percent) and the Brazilian Real (18 percent) are the next highest positive movers in the latest trends data.

The Japanese Yen (-30 percent) leads the downside trend scores currently with the Mexican Peso (-27 percent), Canadian Dollar (-22 percent) and the EuroFX (-11 percent) following next with lower trend scores.

Strength Trend Statistics:
US Dollar Index (32.2 percent) vs US Dollar Index previous week (33.6 percent)
EuroFX (-10.9 percent) vs EuroFX previous week (1.4 percent)
British Pound Sterling (42.5 percent) vs British Pound Sterling previous week (46.0 percent)
Japanese Yen (-29.9 percent) vs Japanese Yen previous week (-8.0 percent)
Swiss Franc (10.8 percent) vs Swiss Franc previous week (7.9 percent)
Canadian Dollar (-22.3 percent) vs Canadian Dollar previous week (-41.6 percent)
Australian Dollar (63.8 percent) vs Australian Dollar previous week (27.3 percent)
New Zealand Dollar (79.0 percent) vs New Zealand Dollar previous week (65.8 percent)
Mexican Peso (-27.1 percent) vs Mexican Peso previous week (-30.4 percent)
Brazilian Real (18.0 percent) vs Brazilian Real previous week (20.2 percent)
Bitcoin (-6.7 percent) vs Bitcoin previous week (0.9 percent)

Individual COT Forex Markets:

US Dollar Index Futures:

The US Dollar Index large speculator standing this week resulted in a net position of 17,522 contracts in the data reported through Tuesday. This was a weekly lowering of -73 contracts from the previous week which had a total of 17,595 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 41.4 percent. The commercials are Bullish with a score of 59.8 percent and the small traders (not shown in chart) are Bearish with a score of 32.6 percent.

Price Trend-Following Model: Strong Uptrend

Our weekly trend-following model classifies the current market price position as: Strong Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

US DOLLAR INDEX Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	74.0	14.6	8.9
– Percent of Open Interest Shorts:	33.4	59.5	4.6
– Net Position:	17,522	-19,365	1,843
– Gross Longs:	31,947	6,304	3,848
– Gross Shorts:	14,425	25,669	2,005
– Long to Short Ratio:	2.2 to 1	0.2 to 1	1.9 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	41.4	59.8	32.6
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	32.2	-32.8	5.7

Euro Currency Futures:

The Euro Currency large speculator standing this week resulted in a net position of -8,431 contracts in the data reported through Tuesday. This was a weekly fall of -16,382 contracts from the previous week which had a total of 7,951 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 16.7 percent. The commercials are Bullish-Extreme with a score of 85.5 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 11.5 percent.

Price Trend-Following Model: Strong Downtrend

Our weekly trend-following model classifies the current market price position as: Strong Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

EURO Currency Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	25.7	60.1	11.0
– Percent of Open Interest Shorts:	27.0	61.6	8.2
– Net Position:	-8,431	-9,767	18,198
– Gross Longs:	167,370	390,837	71,392
– Gross Shorts:	175,801	400,604	53,194
– Long to Short Ratio:	1.0 to 1	1.0 to 1	1.3 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	16.7	85.5	11.5
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-10.9	10.7	-6.7

British Pound Sterling Futures:

The British Pound Sterling large speculator standing this week resulted in a net position of 44,048 contracts in the data reported through Tuesday. This was a weekly fall of -3,573 contracts from the previous week which had a total of 47,621 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 82.5 percent. The commercials are Bearish with a score of 20.5 percent and the small traders (not shown in chart) are Bullish with a score of 64.2 percent.

Price Trend-Following Model: Strong Uptrend

Our weekly trend-following model classifies the current market price position as: Strong Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

BRITISH POUND Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	49.4	33.5	13.6
– Percent of Open Interest Shorts:	28.2	55.1	13.1
– Net Position:	44,048	-45,026	978
– Gross Longs:	102,547	69,497	28,209
– Gross Shorts:	58,499	114,523	27,231
– Long to Short Ratio:	1.8 to 1	0.6 to 1	1.0 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	82.5	20.5	64.2
– Strength Index Reading (3 Year Range):	Bullish-Extreme	Bearish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	42.5	-40.2	16.2

Japanese Yen Futures:

The Japanese Yen large speculator standing this week resulted in a net position of -173,900 contracts in the data reported through Tuesday. This was a weekly decline of -26,147 contracts from the previous week which had a total of -147,753 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 3.8 percent. The commercials are Bullish-Extreme with a score of 100.0 percent and the small traders (not shown in chart) are Bullish with a score of 57.6 percent.

Price Trend-Following Model: Strong Downtrend

Our weekly trend-following model classifies the current market price position as: Strong Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

JAPANESE YEN Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	10.2	76.2	11.1
– Percent of Open Interest Shorts:	61.3	22.8	13.5
– Net Position:	-173,900	181,858	-7,958
– Gross Longs:	34,576	259,292	37,891
– Gross Shorts:	208,476	77,434	45,849
– Long to Short Ratio:	0.2 to 1	3.3 to 1	0.8 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	3.8	100.0	57.6
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-29.9	29.5	-2.7

Swiss Franc Futures:

The Swiss Franc large speculator standing this week resulted in a net position of -35,057 contracts in the data reported through Tuesday. This was a weekly advance of 2,333 contracts from the previous week which had a total of -37,390 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 19.1 percent. The commercials are Bullish-Extreme with a score of 84.9 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 12.3 percent.

Price Trend-Following Model: Downtrend

Our weekly trend-following model classifies the current market price position as: Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

SWISS FRANC Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	7.7	80.7	11.0
– Percent of Open Interest Shorts:	49.4	22.1	27.9
– Net Position:	-35,057	49,331	-14,274
– Gross Longs:	6,506	67,969	9,253
– Gross Shorts:	41,563	18,638	23,527
– Long to Short Ratio:	0.2 to 1	3.6 to 1	0.4 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	19.1	84.9	12.3
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	10.8	-4.1	-16.4

Canadian Dollar Futures:

The Canadian Dollar large speculator standing this week resulted in a net position of -122,412 contracts in the data reported through Tuesday. This was a weekly boost of 25,519 contracts from the previous week which had a total of -147,931 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 13.5 percent. The commercials are Bullish-Extreme with a score of 85.8 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 18.2 percent.

Price Trend-Following Model: Downtrend

Our weekly trend-following model classifies the current market price position as: Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

CANADIAN DOLLAR Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	10.0	76.9	10.4
– Percent of Open Interest Shorts:	53.9	31.5	11.8
– Net Position:	-122,412	126,330	-3,918
– Gross Longs:	27,790	214,107	29,063
– Gross Shorts:	150,202	87,777	32,981
– Long to Short Ratio:	0.2 to 1	2.4 to 1	0.9 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	13.5	85.8	18.2
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-22.3	21.4	-16.7

Australian Dollar Futures:

The Australian Dollar large speculator standing this week resulted in a net position of -23,676 contracts in the data reported through Tuesday. This was a weekly advance of 17,980 contracts from the previous week which had a total of -41,656 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 100.0 percent. The commercials are Bearish-Extreme with a score of 1.5 percent and the small traders (not shown in chart) are Bullish with a score of 70.4 percent.

Price Trend-Following Model: Strong Uptrend

Our weekly trend-following model classifies the current market price position as: Strong Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

AUSTRALIAN DOLLAR Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	35.7	45.6	15.1
– Percent of Open Interest Shorts:	48.8	34.9	12.7
– Net Position:	-23,676	19,343	4,333
– Gross Longs:	64,620	82,549	27,370
– Gross Shorts:	88,296	63,206	23,037
– Long to Short Ratio:	0.7 to 1	1.3 to 1	1.2 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	100.0	1.5	70.4
– Strength Index Reading (3 Year Range):	Bullish-Extreme	Bearish-Extreme	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	63.8	-58.0	11.7

New Zealand Dollar Futures:

The New Zealand Dollar large speculator standing this week resulted in a net position of 26,642 contracts in the data reported through Tuesday. This was a weekly advance of 6,313 contracts from the previous week which had a total of 20,329 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 100.0 percent. The commercials are Bearish-Extreme with a score of 0.0 percent and the small traders (not shown in chart) are Bullish with a score of 71.3 percent.

Price Trend-Following Model: Weak Downtrend

Our weekly trend-following model classifies the current market price position as: Weak Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

NEW ZEALAND DOLLAR Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	72.3	17.8	7.5
– Percent of Open Interest Shorts:	28.2	63.4	6.0
– Net Position:	26,642	-27,567	925
– Gross Longs:	43,711	10,779	4,540
– Gross Shorts:	17,069	38,346	3,615
– Long to Short Ratio:	2.6 to 1	0.3 to 1	1.3 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	100.0	0.0	71.3
– Strength Index Reading (3 Year Range):	Bullish-Extreme	Bearish-Extreme	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	79.0	-76.6	26.3

Mexican Peso Futures:

The Mexican Peso large speculator standing this week resulted in a net position of 57,806 contracts in the data reported through Tuesday. This was a weekly lift of 7,552 contracts from the previous week which had a total of 50,254 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 59.8 percent. The commercials are Bearish with a score of 40.8 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 18.6 percent.

Price Trend-Following Model: Strong Downtrend

Our weekly trend-following model classifies the current market price position as: Strong Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

MEXICAN PESO Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	49.0	47.4	2.9
– Percent of Open Interest Shorts:	15.4	81.7	2.2
– Net Position:	57,806	-58,963	1,157
– Gross Longs:	84,314	81,667	5,020
– Gross Shorts:	26,508	140,630	3,863
– Long to Short Ratio:	3.2 to 1	0.6 to 1	1.3 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	59.8	40.8	18.6
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-27.1	27.5	-15.8

Brazilian Real Futures:

The Brazilian Real large speculator standing this week resulted in a net position of -22,320 contracts in the data reported through Tuesday. This was a weekly reduction of -2,563 contracts from the previous week which had a total of -19,757 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 18.0 percent. The commercials are Bullish-Extreme with a score of 83.7 percent and the small traders (not shown in chart) are Bearish with a score of 23.7 percent.

Price Trend-Following Model: Strong Downtrend

Our weekly trend-following model classifies the current market price position as: Strong Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

BRAZIL REAL Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	38.5	56.3	2.2
– Percent of Open Interest Shorts:	61.4	32.2	3.3
– Net Position:	-22,320	23,477	-1,157
– Gross Longs:	37,622	54,945	2,107
– Gross Shorts:	59,942	31,468	3,264
– Long to Short Ratio:	0.6 to 1	1.7 to 1	0.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	18.0	83.7	23.7
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	18.0	-16.3	-10.9

Bitcoin Futures:

The Bitcoin large speculator standing this week resulted in a net position of -624 contracts in the data reported through Tuesday. This was a weekly increase of 99 contracts from the previous week which had a total of -723 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 57.0 percent. The commercials are Bullish with a score of 70.8 percent and the small traders (not shown in chart) are Bearish with a score of 21.6 percent.

Price Trend-Following Model: Weak Uptrend

Our weekly trend-following model classifies the current market price position as: Weak Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

BITCOIN Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	73.3	3.7	5.0
– Percent of Open Interest Shorts:	75.3	2.9	3.7
– Net Position:	-624	241	383
– Gross Longs:	22,103	1,121	1,499
– Gross Shorts:	22,727	880	1,116
– Long to Short Ratio:	1.0 to 1	1.3 to 1	1.3 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	57.0	70.8	21.6
– Strength Index Reading (3 Year Range):	Bullish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-6.7	16.8	-4.9

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.

28 Jun

EUR/USD continues to struggle amid US inflation concerns

By RoboForex Analytical Department

EUR/USD is on a downward trajectory on Friday, hovering around 1.0686 after a short-lived pause. The dollar experienced a temporary dip due to mixed American economic indicators and market anticipation ahead of the critical Core PCE inflation report, a significant factor in Federal Reserve decision-making.

Yesterday’s data showed a larger-than-expected decrease in US unemployment claims and a modest rise in Durable Goods Orders for May, although Core PCE dipped. The final GDP figures for Q1 2024 were slightly adjusted upward, showing the US economy grew by 1.4% compared to the previously estimated 1.3%, in contrast to the 3.4% growth seen in Q4 2023.

US Treasury yields also saw a minor decline, contributing to the dollar’s brief retreat. However, market dynamics are shifting as focus intensifies on today’s economic releases, including the Core PCE data, personal income and expenditures, and the University of Michigan’s May consumer sentiment index.

EUR/USD technical analysis

The EUR/USD has completed a downward movement to 1.0666 and corrected up to 1.0715. Currently, the market is forming another downward wave, targeting 1.0655. Should this level be reached, a rebound to 1.0690 is possible before continuing the downward trend towards at least 1.0577. This bearish outlook is supported by the MACD indicator, which remains below zero with a firm downward trajectory.

On the H1 chart, EUR/USD is consolidating around 1.0690. A downward breakout could lead to a continuation of the decline to 1.0655. Subsequently, a corrective move to 1.0690 may occur before a further drop to 1.0640. The Stochastic oscillator, hovering near 20, suggests potential for further declines before a rebound to 80 could happen, indicating volatile short-term movements.

Market outlook

Investors are advised to closely monitor the upcoming US economic data, which will likely influence Federal Reserve policy expectations and impact EUR/USD movements. The currency pair remains sensitive to shifts in US economic indicators and Federal Reserve signals regarding interest rates.

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

27 Jun

Yen under pressure as USD/JPY hits new highs since 1986

By RoboForex Analytical Department

The USD/JPY pair soared to 160.34 on Thursday, reaching levels not seen since 1986, as market participants increasingly anticipate potential interventions from Japanese authorities. Despite repeated verbal assurances, the Japanese government has not taken concrete financial measures, leaving the yen vulnerable.

Finance Minister Shunichi Suzuki reiterated that the government stands ready to counteract sudden and undesirable fluctuations in the yen’s value, highlighting its preparedness to engage in market operations if necessary. However, when and how these interventions might occur remains uncertain, adding to the yen’s woes.

A significant factor in the yen’s ongoing decline is the stark contrast in interest rates between the Bank of Japan, which maintains a rate close to zero, and the Federal Reserve. This disparity has been a primary driver of the yen’s weakness, with the currency losing approximately 2% against the dollar in June alone, culminating in a 14% decline over the year.

USD/JPY technical analysis

The USD/JPY has broken through the critical 160.00 level, reaching up to 160.85. The market is currently retracing to test the 160.00 level from above. Should this level hold, we anticipate further growth towards 161.30, potentially extending the bullish trend to 163.30. This bullish scenario is supported by the MACD indicator, which shows the signal line well above zero, indicating strong upward momentum.

On the H1 chart, after reaching 160.85, the pair is undergoing a correction towards 160.00. Completion of this correction could pave the way for another ascent to 161.30. This view is technically reinforced by the Stochastic oscillator, which is currently below 20 and poised for a rebound towards 80, suggesting a potential resurgence in buying pressure.

Market outlook

As the discrepancy between US and Japanese monetary policies continues to influence the USD/JPY, traders should remain alert to any signs of actual intervention by Japanese authorities. Such intervention could significantly impact market dynamics, potentially stalling or reversing the yen’s current depreciation trend.

Disclaimer

Financial News Forex and Currency News

26 Jun

AUD/USD surged, buoyed by RBA confidence and inflation growth

By RoboForex Analytical Department

The Australian dollar strengthened notably against the US dollar, with the AUD/USD pair reaching 0.6684. Australia’s May economic indicators from MI remained unchanged at zero compared to the previous value. Meanwhile, Australia’s weighted average consumer price index increased to 4.0% y/y from the last 3.6%, surpassing the less ambitious forecast of 3.8%.

Earlier statistics from Westpac also showed a rise in Australia’s consumer sentiment index in June, climbing by 1.7%, following a 0.3% decline in May.

At the Australian Banking Association conference, RBA Assistant Governor Chris Kent indicated that the Reserve Bank of Australia is not overly concerned about the growing interest in private loans among consumers. Kent highlighted the significant role that private credit plays in the market and underscored that the RBA is closely monitoring developments. However, the regulator is not overly concerned about growth in this area, as it is not particularly large in Australia.

Meanwhile, business investment is on the rise. Kent drew attention to a notable disparity between business confidence, business conditions, and consumer sentiment. The latter position appears to be below average levels.

AUDUSD technical analysis

On the H4 chart of AUD/USD, the market ended the correction at 0.6577. Today, we consider a consolidation range forming around the level of 0.6666. With an upside exit, we will consider the probability of another growth structure to the level of 0.6703 with the prospect of continued growth to 0.6744. A correction link to the level of 0.6666 (test from above) is possible, followed by potential growth towards 0.6750. Technically, the MACD indicator supports this scenario. Its signal line is above the zero mark and is directed strictly upwards.

On the H1 chart of AUD/USD, a correction to 0.6626 is executed. Today, the market broke upwards to 0.6666 and continues growing towards 0.6694 with the prospect of continuing the development of the wave structure to 0.670, the local target. Technically, this scenario is confirmed by the Stochastic oscillator. Its signal line is above the level of 80. We expect the beginning of the decline to the level of 20.

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24 Jun

Trade of the Week: USDInd set for rollercoaster ride?

By ForexTime

USDInd ↑ 0.9% MTD

US Presidential debate & PCE deflators in focus

Over past year PCE deflators triggered moves of 0.3% ↑ or ↓

Technical levels – 106.50, 105.60 & 105.20

Watch this space because FXTM’s USDInd could be jolted by economic and political forces!

It’s all about the Biden vs. Trump faceoff and US PCE deflators which may translate to heightened dollar volatility this week.

After securing a weekly close above the 105.60 resistance, prices are turning increasingly bullish. However, the next major level for bulls to crack can be found at 106.50.

Note: FXTM’s USDInd tracks the US Dollar Index. This measures how the dollar performs against a basket of six different G10 currencies, including the Euro, British Pound, Japanese Yen, and Canadian dollar.

The lowdown…

Dollar bulls have made a return this month thanks to stronger-than-expected US data including the solid US May jobs report. Last Friday, reports revealed that both U.S manufacturing and services sectors expanded in June – further trimming rate cut bets.

The USDInd could end H1 with a bang, here are 3 reasons why:

1) Biden vs. Trump: US Presidential debate

The spotlight shines on the first US presidential debate on Thursday, June 27th.

Investors will most likely focus on every little detail, starting from mental states, messaging, overall accuracy of information, and policies among other things. There are just over four months till the US presidential election with national polls suggesting that Biden and Trump are neck-and-neck! This could add more flavour to the upcoming debate which may shape the overall election result.

Whatever the outcome of this big political event, it could trigger fresh volatility for the dollar and across financial markets.

2) US May PCE deflators

On the data front, the Fed’s preferred inflation gauge – the Core PCE could influence expectations about when the central bank will cut rates in 2024.

Markets are forecasting PCE deflators to cool in May with the core figure falling to 2.6% year-on-year compared with the 2.8% seen in the previous month. Ultimately, more signs of cooling price pressures could boost bets around lower US interest rates.

Traders are currently pricing in a 73% probability of a 25-basis point cut in September with a move fully priced in by November.

It will be wise to keep an eye on speeches by numerous Fed officials and other US data that could also move the USDInd.

Golden nugget: Over the past year, the US PCE deflators have triggered upside moves of as much as 0.3% or declines of 0.3% in a 6-hour window post-release.

The USDInd may slip on more signs of cooling price pressures in the United States, with dovish comments by Fed officials fuelling the downside.

Should the PCE deflators print higher than expected, this may support USDInd bulls as markets further push back Fed cut expectations.

3) Technical forces

Prices are trending higher on the daily charts with support levels at 105.60 and 105.20.

There have been consistently higher highs and lows, while the candlesticks are trading above the 50, 100 and 200-day SMA.

Should 105.60 prove to be reliable support, this could encourage an incline towards 106.50.

A daily close below 105.60 could see prices re-test 105.20.

Weakness below 105.20 may open the doors towards the 100-day SMA at 104.70.

Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Forex and Currency News Opinions

21 Jun

The yen is falling again: the devaluation scenario remains the main one

By RoboForex Analytical Department

The Japanese yen is weakening against the US dollar again. The USD/JPY pair is rising to 158.97.

The currency pair is now again close to the levels when the Bank of Japan and the country’s authorities conducted currency interventions. Japan’s top currency diplomat, Masato Kanda, stated that the government is prepared to take measures against speculative movements of the national currency.

Among the significant news items, attention is drawn to the information that the US has added Japan to the list of countries being monitored for currency manipulation.

Following its regular committee meeting last week, the Bank of Japan refused to agree on reducing large-scale bond purchases. It plans to present a plan to wind down such a program at a meeting in July. The market interpreted this decision in different ways, but mostly negatively.

Inflation in Japan rose from 2.5% in April to 2.8% year-on-year in May, the maximum value since February of this year. The core consumer price index accelerated to 2.5% year-on-year despite being 2.2% earlier. Meanwhile, the forecast was not met and stood at 2.6%.

Technical analysis of USD/JPY

On the H4 USD/JPY chart, the market has achieved a wave of growth to 158.80. Today, a consolidation range is forming around this level. With the exit from this range downwards, we will consider a correction to the level of 158.40. An upward exit will open the potential for a growth wave to 159.35, the main target. This scenario is technically confirmed by the MACD indicator. Its signal line is above the zero level and is directed strictly upwards.

On the H1 USD/JPY chart, the market continues to develop a consolidation range around 158.80. With the exit down, we will consider the development of the correction towards at least 158.40. After the completion of this correction, we expect the beginning of a new growth structure to the level of 159.35. Technically, this scenario is confirmed by the Stochastic oscillator. Its signal line is below level 50 and is preparing to decline to level 20.

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21 Jun

Week Ahead: Yen headed for intervention “danger zone”?

By ForexTime

JPY is worst-performing G10 currency vs. USD in 1H24
USDJPY’s 160 price area triggered largest-ever JPY intervention in late-April
Besides intervention risk, traders watching Friday’s US/Japan inflation data
Bloomberg model: 77% chance of 156.69-160.58 trading range next week

The Yen is returning closer towards its 34-year low against the US dollar.

This widely-traded FX pair posted its 6th straight day of gains, with the Yen set for its longest losing streak against the US dollar since March.

Already the Yen is set to wrap up the first half of 2024 with the title of worst-performing G10 currency against the US dollar, by a mile.

Why is the Yen so weak?

USDJPY’s stunning ascent has been primarily driven by the surprise reluctance by both the US and Japanese central banks to change their policy stances:

The Bank of Japan has not been as quick to HIKE interest rates so far this year
The US Federal Reserve has not been as quick to CUT interest rates so far this year

Recall that a currency tends to weaken when its country’s interest rates are lower than its peers, and vice versa.

This persistent policy divergence has resulted in a still-wide spread between US Treasury yields and their Japanese counterparts, which greatly favours USD demand over JPY.

In other words …

With Japan’s interest rates staying lower-for-longer, while the Fed’s benchmark rates remain higher for longer, that has resulted in a resilient US Dollar and a weaker Japanese Yen, i.e. soaring USDJPY.

What should traders look out for?

Traders, especially Yen bears, are entering the final trading week of 1H24 with memories from end-April, which was the last time USDJPY was seen around these current levels.

Starting April 26th, the Japanese government had spent a record US$62.2 billion to defend its currency.

That record intervention contributed to USDJPY’s largest one-day price swing since 2022, as the FX pair breached 160, only to plummet to as low as 154.52.

That was a painful lesson for Yen bears (those hoping that USDJPY can move higher), although another showdown appears to be shaping up.

Hence, if we do see another round of intervention on the Yen, that could translate into massive profits for Yen bulls (those hoping for lower USDJPY).

Beyond the threat of another round of government intervention, the coming week also features scheduled events that could rock USDJPY:

Monday, June 24

NZD: New Zealand May trade balance
JPY: BoJ Summary of Opinions
SG20 index: Singapore May CPI
TWN index: Taiwan May unemployment, industrial production
GER40 index: Germany June IFO business climate
US30 index: Speech by San Francisco Fed President Mary Daly

Tuesday, June 25

AU200 index: Australia June consumer confidence
CAD: Canada CPI
USD index: US June consumer confidence; speeches by Fed Governors Lisa Cook and Michelle Bowman

Wednesday, June 26

AUD: Australia May CPI
GER40 index: Germany July consumer confidence

Thursday, June 27

JP225 index: Japan May retail sales
CNH: China May industrial profits
TRY: Turkey rate decision
SEK: Sweden rate decision
EU50 index: Eurozone June economic confidence
USD: US weekly initial jobless claims; 1Q GDP (final)
Nike earnings
Biden vs. Trump: US Presidential election debate

Friday, June 28

JPY: Tokyo June CPI; May jobless rate and industrial production
EUR: Germany June unemployment; France June CPI
GBP: UK 1Q GDP (final)
USD index: US May PCE deflators, personal income and spending; June consumer sentiment (final)

USDJPY set for freaky Friday?

Two events out of either side of the Pacific may hold greater potential to rock USDJPY on the final trading day of 1H24:

1) Tokyo June consumer price index (CPI)

Here’s what economists expect:

CPI year-on-year (June 2024 vs. June 2023): 2.3%
If so, that would be slightly higher than May’s 2.2% year-on-year figure.
CPI year-on-year (excluding fresh food): 2.0%
If so, that would be slightly higher than May’s 1.9% year-on-year figure.
CPI year-on-year (excluding fresh food and energy): 1.6%
If so, that would be slightly higher than May’s 1.7% year-on-year figure.

Over the past 12 months, the 6 hours after these Tokyo CPI releases had seen upwards moves for USDJPY as much as 0.38%, or declines as much as 0.3%.

2) US May PCE Deflators

(this is the Fed’s preferred measure of inflation)

Here’s what economists expect:

PCE Deflator month-on-month (June 2024 vs. May 2024): 0.0%
If so, that would be a notable drop from May’s 0.3% month-on-month figure.
PCE Deflator year-on-year (June 2024 vs. June 2023): 2.6%
If so, that would be slightly lower than May’s 2.7% year-on-year figure.
PCE Core Deflator month-on-month (excluding food and energy prices): 0.1%
If so, that would be slightly lower from May’s 0.2% month-on-month figure.
PCE Core Deflator year-on-year (excluding food and energy): 2.6%
If so, that would be lower than May’s 2.8% year-on-year figure.

Over the past 12 months, the 6 hours after these US PCE Deflators had seen upwards moves for USDJPY as much as 1%, or declines as much as 0.35%.

POTENTIAL SCENARIOS:

USDJPY may fall if we see higher-than-expected Tokyo inflation (which is a frontrunner to the National CPI due later) which could allow the Bank of Japan to hike rates – a thought which should prompt a stronger Yen.On the US dollar side of the USDJPY equation, lower-than-expected US inflation might pave the way for the Fed to lower interest rates this year – potentially prompting the US dollar to weaken.

USDJPY may rise if we see lower-than-expected Tokyo inflation, which could further deter the Bank of Japan to hike rates – a thought which should prompt an even weaker Yen.On the US dollar side of the USDJPY equation, higher-than-expected US inflation might further delay the expected Fed rate cuts for later this year – potentially prompting a stronger US dollar.

Key levels

POTENTIAL RESISTANCE

160.00
The closer USDJPY moves towards this psychologically-important number, the louder the echoes of April’s intervention may haunt traders.Though to be clear, Japanese government officials have often warned that it’s the magnitude of the move, rather than a specific number, that invokes intervention.

Hence, an only gradual break above 160 may well prolong this battle between Yen bears and the Japanese government.

POTENTIAL SUPPORT

158.427 – 157.80 region
If traders grow wary of the intervention threat, that may prompt some profit-taking and push USDJPY back towards recent peaks-turned-support
21-day SMA
156.787: mid-May cycle high

According to the Bloomberg FX forecast model, there’s a 77% chance that USDJPY will trade between 156.69 – 160.58 before we enter July.

Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Forex and Currency News Opinions

20 Jun

The pound froze ahead of the Bank of England meeting: what will the Central Bank decide?

By RoboForex Analytical Department

The GBP/USD pair is balancing around 1.2709 on Thursday, after the British pound rose in price against the US dollar for three consecutive days and finally paused.

The Bank of England will convene for its regular meeting today, at which the regulator will review all the collected statistics and decide on the interest rate level. The prevailing forecast suggests the rate will remain unchanged at 5.25% per annum. However, other options are always possible.

It will be interesting to see how the BoE will assess its success in fighting inflation. The UK consumer price index slowed to 2.0% in May from 2.3% earlier. In comparison, the indicator increased by 0.3% month-over-month, as in April, while an increase of 0.4% m/m was expected.

It can be said with confidence that the inflation trend has developed positively. It is now essential that the Bank of England also notices and applies this.

The BoE may be able to reduce the rate at least twice in 2024. The business sector, industry, and retail are ready for this.

Technical analysis of GBP/USD

On the H4 GBP/USD chart, the first impulse of decline to the level of 1.2656 has been executed. Today, the market is forming a correction to the level of 1.2760. After reaching this level, we will consider the beginning of a decline to 1.2670. With the breakdown of this level, the potential of the wave will open to the level of 1.2576, a local target. Further, a correction wave to 1.2670 is possible (testing from below). Then, we will consider the beginning of a wave of decline to 1.2486, the main target. Technically, this scenario is confirmed by the MACD indicator. Its signal line is below the zero mark and continues developing the decline structure to new lows.

On the H1 GBP/USD chart, a correction wave was performed to 1.2739, and the decline structure to 1.2692 is forming today. After working out this level, let’s consider the growth probability towards 1.2760. At this point, the correction potential will be exhausted. After the correction is completed, we will consider the beginning of a new wave of decline to 1.2670. Technically, this scenario is confirmed by the Stochastic oscillator. Its signal line is below the zero level and continues to decline to the level of 20.

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19 Jun

The New Zealand dollar faces growth challenges

By RoboForex Analytical Department

The NZD/USD pair declined to 0.6135 on Wednesday, despite the New Zealand dollar performing much better in the previous session. It rose in response to the fall of the US dollar, which was triggered by weaker-than-expected US retail sales data. These results increased bets on an imminent reduction in the cost of lending by the Federal Reserve System. This caused the USD to retreat, allowing other currencies to rise.

Today, Paul Conway, the chief economist of the Reserve Bank of New Zealand, announced that the process of returning inflation to the target is progressing well. The ongoing softening of the employment sector is releasing spare capacity in the economy, likely leading to a further reduction in inflationary pressure in the economic system.

At the same time, Conway noted that the inflation reduction process may not follow the predicted timeline. An extended period of maintaining a restrictive monetary policy is necessary to achieve a lasting result, a crucial step to ensure the goal is met. The market’s attention will now shift to the upcoming Q1 GDP statistics. The data may reflect a fairly modest increase, which could hurt the NZD.

Technical analysis of NZD/USD

On the H4 NZD/USD chart, the market executed a wave of decline to the level of 0.6097 and a correction to the level of 0.6148. Today, we expect another downward trend to 0.6075, the first goal. After reaching this level, a correction to 0.6140 is possible (testing from below). Next, we will consider a new wave of decline to 0.6028, the local target. This scenario is technically confirmed by the MACD indicator, as its signal line is below the zero mark. An update of the lows is expected.

On the H1 NZD/USD chart, a correction has formed to 0.6148 (testing from below). Today, we expect a decrease to 0.6111. The breakdown of this level will open the potential for a downward trend to 0.6075. Technically, this scenario is also confirmed by the Stochastic oscillator. Its signal line is below the 50 mark, and another decline to the level of 20 is expected.

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17 Jun

The New Zealand dollar is falling

By RoboForex Analytical Department

Like other major currencies, the New Zealand dollar is under pressure from the strong US dollar. This development comes after the Federal Reserve’s updated forecasts last week. Stock market expectations point to only one interest rate cut this year, most likely in December.

Earlier, some American monetary policymakers confirmed these expectations, calling them reasonable.

The New Zealand services sector experienced a significant downturn in May, dropping the indicator to its lowest value since 2007. This reflects the country’s economic state, which is already in recession. The business activity index also decreased to 43.0 points from 46.6 points previously. Everything below the 50.0-point mark indicates a deterioration in the market situation.

Such data increases the likelihood that the Reserve Bank of New Zealand will decide to cut rates eventually. The main forecast is November. However, the RBNZ’s position, which has been voiced repeatedly, is that in 2024, the rates are unlikely to be revised down. The Central Bank believes that any reduction is not likely before mid-2025.

NZD/USD Technical Analysis

On the H4 NZD/USD chart, the market executed a correction wave to the level of 0.6220. At the moment, the market is forming another wave following the downward trend. The first target is at 0.6055. After reaching this level, a correction link to 0.6140 is possible (test from below). Next, we will consider a new wave of decline to 0.6016, the local target. Technically, this scenario is confirmed by the MACD indicator. Its signal line is located below the zero mark and is directed strictly downwards.

On the H1 NZD/USD chart, a downward impulse has been executed towards 0.6140. At the moment, a consolidation range has formed around this level. Today, we expect an exit from this range down to 0.6080. After reaching this level, a correction link to 0.6140 is possible (test from below), followed by a further decrease to 0.6055. The first target is trending down. Technically, this scenario is also confirmed by the Stochastic oscillator. Its signal line is located below the 20 mark and is directed strictly downwards.

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