Forex and Currency News

Archive for Forex and Currency News – Page 15

03 Jun

Trade of the Week: USDInd seeks fresh directional catalyst

By ForexTime

USDInd ends May ↓1.7%

ECB meeting & NFP in focus

Over past year ECB triggered moves of 0.6% ↑ or ↓

Trapped in D1 range since mid-May

Technical levels – 105.20 and 104.20

After bouncing within a 1000-point range since mid-May, FXTM’s USDInd is on breakout watch!

A high-risk cocktail featuring the European Central Bank (ECB) and US jobs report could rock the index this week.

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.

Interestingly, the dollar depreciated against every single G10 currency in May.

Three heavy-hitting events in May knocked the dollar.

Starting from the dovish Fed meeting, soft US April jobs report, and cooler-than-expected CPI print. Last Friday, the Fed’s preferred inflation gauge – core PCE also printed below market forecasts, keeping the doors open for lower interest rates in 2024.

With all the above said, here are 3 reasons why the USDInd could see significant moves this week:

1) ECB rate decision

The ECB is widely expected to cut interest rates by 25 basis points at its meeting on Thursday, June 6th.

So, the focus will be on the press conference for fresh insight into what to expect in H2, especially after Germany and Eurozone inflation edged up in May.

Note: The Euro accounts for almost 60% of the US Dollar Index weighting. A weaker euro tends to push the index higher and vice versa.

As of writing, traders are pricing in a 90% probability of a second 25-basis point cut by October with the odds of a third cut by the end of 2024 around 40%.

The USDInd could push higher if the ECB strikes a dovish tone, and signals further cuts down the road.

Should the central bank sound more hawkish and signal a “one and done” rate cut for 2024, this may send the USDInd lower.

Fun fact: Over the past 12 months, the ECB rate decision has sparked upside moves as much as 0.6% or declines of 0.6% in the 6 hours post-release.

2) US May NFP report

This major economic release is likely to influence expectations around when the Fed cuts rates in 2024.

Markets expect the US economy to have created 190k jobs in May, compared to the 175k in the previous month while the unemployment rate is expected to remain steady at 3.9%.

Traders are currently pricing in a 60% probability of a 25-basis point cut by September with this jumping to over 90% by November.

A soft jobs report that boosts Fed cut bets may send the USDInd lower.

If the jobs data prints above market forecasts, this may push the USDInd higher.

Fun fact: Over the past 12 months, the US jobs report has trigged up moves as much as 0.4% or declines of 0.6% in the 6 hours after release.

3) Technical forces

Prices remain in a range on the daily charts with support at 104.20 and resistance at 105.20.

A sold breakout above 105.20 may signal a move towards 105.60.

Should prices slip below 104.20, bears may be encouraged to target 103.90.

Article by ForexTime

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

Financial News Forex and Currency News

02 Jun

GBP and Euro Speculator bets rise for multiple weeks

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 May 28th 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 British Pound & EuroFX

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

Leading the gains for the currency markets was the British Pound (24,349 contracts), the EuroFX (16,097 contracts), the Australian Dollar (6,317 contracts), Canadian Dollar (4,239 contracts), New Zealand Dollar (3,416 contracts), Mexican Peso (3,027 contracts), the Brazilian Real (1,076 contracts), the US Dollar Index (656 contracts) and with Bitcoin (134 contracts) also having a positive week.

The currencies seeing declines in speculator bets on the week were the Japanese Yen (-11,672 contracts) and the Swiss Franc (-3,721 contracts).

GBP and Euro Speculator bets rise for multiple weeks

To start this week’s COT currency roundup, the Euro positions have continued to improve after the speculator contracts dropped into a bearish position in late-April. This was the first time since September of 2022 that Euro bets had fallen into negative territory. Since then, the Euro speculative bets have risen for five straight weeks and by a total of +67,561 contracts in that period. Euro bets, currently at +57,572 contracts, have now climbed back to the best level in the past eleven weeks, dating back to March 12th. The EURUSD exchange rate still has some work to do as it remains below the 1.10 major resistance area.

The British pound sterling speculator contracts rose again this week and has jumped by over +20,000 contracts for the second consecutive week. Overall, the GBP bet have now improved for four straight weeks with a gain of +54,392 contracts in the past four weeks. The speculator standing has now come out of a four-week bearish position (April 23rd to May 14th) and is at the highest level since April. The GBPUSD exchange rate has recently hit its highest level since March and is trading around 1.2600 currently. On a trade-weighted basis, Reuters notes that the GBP is near the highest since Brexit.

The Australian dollar speculator bets rose this week for a second consecutive week and have now improved in eight out of the past ten weeks. The AUD position has gained a total of +57,622 contracts over the past ten weeks and has brought the level from a record bearish position of -107,538 contracts on March 19th to a total of -49,916 contracts this week. The current standing is the least bearish level in the past nineteen weeks, dating back to January 16th.

The US dollar index positions increased slightly again this week and have now risen for eight consecutive weeks. The speculator standing had fallen into a bearish position from March 26th to April 30th before coming back over to a bullish level in these past four weeks. That bearish level had marked the first time the USD index bets had been negative since 2021.

The New Zealand dollar speculator position gained for a second straight week and came out of a bearish level into a bullish position this week. The NZD bets had been bearish or negative for the past ten weeks with a recent bearish high of -12,047 contracts taking place on April 23rd. The NZD positioning has been on a rollercoaster of ups and (mostly) downs since 2021 while the NZDUSD exchange had been on the defensive over that time. However, the exchange rate for the NZD versus the USD has started to see higher lows on the weekly charts and is challenging the downward sloping trendline that started in 2021 – pointing to a possible breakout scenerio.

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 Mexican Peso & British Pound

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 Mexican Peso (91 percent) and the British Pound (70 percent) lead the currency markets this week. The New Zealand Dollar (66 percent), Australian Dollar (59 percent) and the Bitcoin (55 percent) come in as the next highest in the weekly strength scores.

On the downside, the Swiss Franc (0 percent), the Brazilian Real (2 percent), the Canadian Dollar (3 percent), the US Dollar Index (14 percent) and the Japanese Yen (14.9 percent) come in at the lowest strength levels currently and are in Extreme-Bearish territory (below 20 percent).

Strength Statistics:
US Dollar Index (13.7 percent) vs US Dollar Index previous week (12.3 percent)
EuroFX (44.8 percent) vs EuroFX previous week (38.0 percent)
British Pound Sterling (70.1 percent) vs British Pound Sterling previous week (54.0 percent)
Japanese Yen (14.9 percent) vs Japanese Yen previous week (22.2 percent)
Swiss Franc (0.0 percent) vs Swiss Franc previous week (6.4 percent)
Canadian Dollar (3.1 percent) vs Canadian Dollar previous week (0.0 percent)
Australian Dollar (58.7 percent) vs Australian Dollar previous week (52.3 percent)
New Zealand Dollar (66.2 percent) vs New Zealand Dollar previous week (56.5 percent)
Mexican Peso (90.8 percent) vs Mexican Peso previous week (89.3 percent)
Brazilian Real (1.9 percent) vs Brazilian Real previous week (0.7 percent)
Bitcoin (55.0 percent) vs Bitcoin previous week (53.0 percent)

Australian Dollar & New Zealand 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 Australian Dollar (52 percent) and the New Zealand Dollar (39 percent) lead the past six weeks trends for the currencies. The EuroFX (19 percent), the US Dollar Index (11 percent) and the British Pound (11 percent) are the next highest positive movers in the latest trends data.

The Brazilian Real (-42 percent) leads the downside trend scores currently with the Swiss Franc (-14 percent), Bitcoin (-6 percent) and the Mexican Peso (-3 percent) following next with lower trend scores.

Strength Trend Statistics:
US Dollar Index (10.8 percent) vs US Dollar Index previous week (9.8 percent)
EuroFX (19.3 percent) vs EuroFX previous week (3.7 percent)
British Pound Sterling (11.1 percent) vs British Pound Sterling previous week (-18.0 percent)
Japanese Yen (6.0 percent) vs Japanese Yen previous week (11.1 percent)
Swiss Franc (-14.1 percent) vs Swiss Franc previous week (-15.3 percent)
Canadian Dollar (-2.8 percent) vs Canadian Dollar previous week (-27.4 percent)
Australian Dollar (52.2 percent) vs Australian Dollar previous week (36.8 percent)
New Zealand Dollar (39.1 percent) vs New Zealand Dollar previous week (34.6 percent)
Mexican Peso (-3.3 percent) vs Mexican Peso previous week (-10.7 percent)
Brazilian Real (-42.2 percent) vs Brazilian Real previous week (-39.5 percent)
Bitcoin (-5.9 percent) vs Bitcoin previous week (-11.1 percent)

Individual COT Forex Markets:

US Dollar Index Futures:

The US Dollar Index large speculator standing this week reached a net position of 4,174 contracts in the data reported through Tuesday. This was a weekly increase of 656 contracts from the previous week which had a total of 3,518 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 13.7 percent. The commercials are Bullish-Extreme with a score of 89.2 percent and the small traders (not shown in chart) are Bearish with a score of 25.9 percent.

Price Trend-Following Model: Uptrend

Our weekly trend-following model classifies the current market price position as: 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:	70.6	17.5	9.0
– Percent of Open Interest Shorts:	60.2	31.1	5.9
– Net Position:	4,174	-5,436	1,262
– Gross Longs:	28,325	7,026	3,621
– Gross Shorts:	24,151	12,462	2,359
– Long to Short Ratio:	1.2 to 1	0.6 to 1	1.5 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	13.7	89.2	25.9
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	10.8	-8.7	-11.4

Euro Currency Futures:

The Euro Currency large speculator standing this week reached a net position of 57,572 contracts in the data reported through Tuesday. This was a weekly gain of 16,097 contracts from the previous week which had a total of 41,475 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 44.8 percent. The commercials are Bullish with a score of 57.5 percent and the small traders (not shown in chart) are Bearish with a score of 22.4 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.

EURO Currency Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	27.8	57.2	12.0
– Percent of Open Interest Shorts:	19.1	69.9	7.9
– Net Position:	57,572	-84,652	27,080
– Gross Longs:	184,656	380,224	79,849
– Gross Shorts:	127,084	464,876	52,769
– Long to Short Ratio:	1.5 to 1	0.8 to 1	1.5 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	44.8	57.5	22.4
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	19.3	-21.0	17.1

British Pound Sterling Futures:

The British Pound Sterling large speculator standing this week reached a net position of 25,402 contracts in the data reported through Tuesday. This was a weekly increase of 24,349 contracts from the previous week which had a total of 1,053 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 70.1 percent. The commercials are Bearish with a score of 27.7 percent and the small traders (not shown in chart) are Bullish with a score of 76.4 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.

BRITISH POUND Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	34.6	43.9	12.5
– Percent of Open Interest Shorts:	25.2	55.9	10.0
– Net Position:	25,402	-32,173	6,771
– Gross Longs:	93,041	118,109	33,632
– Gross Shorts:	67,639	150,282	26,861
– Long to Short Ratio:	1.4 to 1	0.8 to 1	1.3 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	70.1	27.7	76.4
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	11.1	-19.7	38.6

Japanese Yen Futures:

The Japanese Yen large speculator standing this week reached a net position of -156,039 contracts in the data reported through Tuesday. This was a weekly decrease of -11,672 contracts from the previous week which had a total of -144,367 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 14.9 percent. The commercials are Bullish-Extreme with a score of 92.0 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. 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:	8.8	75.9	13.0
– Percent of Open Interest Shorts:	56.8	24.8	16.1
– Net Position:	-156,039	166,122	-10,083
– Gross Longs:	28,565	246,911	42,324
– Gross Shorts:	184,604	80,789	52,407
– Long to Short Ratio:	0.2 to 1	3.1 to 1	0.8 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	14.9	92.0	50.9
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	6.0	-1.0	-25.0

Swiss Franc Futures:

The Swiss Franc large speculator standing this week reached a net position of -44,366 contracts in the data reported through Tuesday. This was a weekly lowering of -3,721 contracts from the previous week which had a total of -40,645 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-Extreme with a score of 0.0 percent. The commercials are Bullish-Extreme with a score of 99.5 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 15.5 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:	8.9	80.7	9.5
– Percent of Open Interest Shorts:	53.1	23.0	23.0
– Net Position:	-44,366	57,936	-13,570
– Gross Longs:	8,943	80,998	9,553
– Gross Shorts:	53,309	23,062	23,123
– Long to Short Ratio:	0.2 to 1	3.5 to 1	0.4 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	0.0	99.5	15.5
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-14.1	7.5	14.4

Canadian Dollar Futures:

The Canadian Dollar large speculator standing this week reached a net position of -86,585 contracts in the data reported through Tuesday. This was a weekly boost of 4,239 contracts from the previous week which had a total of -90,824 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 3.1 percent. The commercials are Bullish-Extreme with a score of 99.1 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 15.4 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:	14.1	71.8	11.1
– Percent of Open Interest Shorts:	46.9	37.6	12.5
– Net Position:	-86,585	90,353	-3,768
– Gross Longs:	37,299	189,745	29,401
– Gross Shorts:	123,884	99,392	33,169
– Long to Short Ratio:	0.3 to 1	1.9 to 1	0.9 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	3.1	99.1	15.4
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-2.8	-0.7	11.8

Australian Dollar Futures:

The Australian Dollar large speculator standing this week reached a net position of -49,916 contracts in the data reported through Tuesday. This was a weekly rise of 6,317 contracts from the previous week which had a total of -56,233 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 58.7 percent. The commercials are Bearish with a score of 44.0 percent and the small traders (not shown in chart) are Bullish with a score of 60.1 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: New Buy – Long Position.

AUSTRALIAN DOLLAR Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	27.8	57.9	12.6
– Percent of Open Interest Shorts:	53.6	32.5	12.3
– Net Position:	-49,916	49,360	556
– Gross Longs:	53,892	112,209	24,416
– Gross Shorts:	103,808	62,849	23,860
– Long to Short Ratio:	0.5 to 1	1.8 to 1	1.0 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	58.7	44.0	60.1
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	52.2	-55.0	43.1

New Zealand Dollar Futures:

The New Zealand Dollar large speculator standing this week reached a net position of 2,046 contracts in the data reported through Tuesday. This was a weekly lift of 3,416 contracts from the previous week which had a total of -1,370 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 66.2 percent. The commercials are Bearish with a score of 36.3 percent and the small traders (not shown in chart) are Bullish with a score of 50.7 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:	46.8	43.5	6.4
– Percent of Open Interest Shorts:	43.2	46.6	6.9
– Net Position:	2,046	-1,779	-267
– Gross Longs:	26,916	25,013	3,687
– Gross Shorts:	24,870	26,792	3,954
– 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):	66.2	36.3	50.7
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	39.1	-39.9	33.2

Mexican Peso Futures:

The Mexican Peso large speculator standing this week reached a net position of 120,919 contracts in the data reported through Tuesday. This was a weekly gain of 3,027 contracts from the previous week which had a total of 117,892 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 90.8 percent. The commercials are Bearish-Extreme with a score of 9.4 percent and the small traders (not shown in chart) are Bearish with a score of 35.3 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.

MEXICAN PESO Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	56.5	39.8	2.7
– Percent of Open Interest Shorts:	11.4	86.3	1.2
– Net Position:	120,919	-124,698	3,779
– Gross Longs:	151,468	106,742	7,111
– Gross Shorts:	30,549	231,440	3,332
– Long to Short Ratio:	5.0 to 1	0.5 to 1	2.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	90.8	9.4	35.3
– Strength Index Reading (3 Year Range):	Bullish-Extreme	Bearish-Extreme	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-3.3	3.5	-3.9

Brazilian Real Futures:

The Brazilian Real large speculator standing this week reached a net position of -36,582 contracts in the data reported through Tuesday. This was a weekly rise of 1,076 contracts from the previous week which had a total of -37,658 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 1.9 percent. The commercials are Bullish-Extreme with a score of 99.0 percent and the small traders (not shown in chart) are Bearish with a score of 27.7 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:	9.2	79.1	2.9
– Percent of Open Interest Shorts:	57.8	29.6	3.9
– Net Position:	-36,582	37,302	-720
– Gross Longs:	6,940	59,601	2,182
– Gross Shorts:	43,522	22,299	2,902
– Long to Short Ratio:	0.2 to 1	2.7 to 1	0.8 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	1.9	99.0	27.7
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-42.2	42.8	-13.3

Bitcoin Futures:

The Bitcoin large speculator standing this week reached a net position of -756 contracts in the data reported through Tuesday. This was a weekly gain of 134 contracts from the previous week which had a total of -890 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 60.9 percent and the small traders (not shown in chart) are Bearish with a score of 33.5 percent.

Price Trend-Following Model: Uptrend

Our weekly trend-following model classifies the current market price position as: 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:	75.2	4.0	5.8
– Percent of Open Interest Shorts:	77.7	4.5	2.8
– Net Position:	-756	-148	904
– Gross Longs:	22,761	1,214	1,763
– Gross Shorts:	23,517	1,362	859
– Long to Short Ratio:	1.0 to 1	0.9 to 1	2.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	55.0	60.9	33.5
– Strength Index Reading (3 Year Range):	Bullish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-5.9	4.2	5.2

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.

31 May

New Zealand Dollar gains for second day against US Dollar

By RoboForex Analytical Department

The New Zealand dollar continues its ascent for the second consecutive session against the US dollar, resulting in the NZD/USD pair climbing to 0.6125. This increase is attributed to recent US economic data indicating slower-than-expected growth in Q1, suggesting the possibility of an interest rate cut by the end of the year.

The market is now focused on the upcoming release of the US Core Personal Consumption Expenditures (Core PCE) report, a pivotal inflation measure for the Federal Reserve. The report’s outcome could offer further insights into the Fed’s future actions.

Meanwhile, the New Zealand government has unveiled its annual budget report, which includes modest tax relief and spending cuts due to subdued economic growth. Other concerns for the economy include rising unemployment and a weak trade balance.

Today’s speech by the Reserve Bank of New Zealand (RBNZ) Governor is highly anticipated, particularly following the central bank’s recent policy meeting.

Technical analysis of NZD/USD

The NZD/USD pair is developing within a wide consolidation range around 0.6136. A downward impulse to 0.6088 has been observed. Today, the market might see a corrective move to 0.6137 (testing from below). Following this correction, a new decline to 0.6070 is anticipated, with a potential breakdown of this level leading to a further decrease to 0.6002. The bearish scenario is technically supported by the MACD indicator, whose signal line is below zero and directed downwards. Notably, there is a significant divergence between the peaks on the chart and the indicator, which traders should monitor closely.

On the H1 chart, after forming a downward impulse to 0.6088, a correction to 0.6137 may occur today. Upon its completion, a new downward wave to 0.6075 is expected, with a potential continuation to 0.6000. This target is the first one in the expected downward trend. The technical setup is confirmed by the Stochastic oscillator, whose signal line is currently above 80 but is pointing sharply downwards, indicating the potential for a decline.

Summary

The NZD/USD pair’s upward movement directly reflects recent US economic data and the market’s expectations of potential Fed policy adjustments. Technical indicators suggest possible short-term corrections followed by further declines, providing critical levels for traders to watch as market conditions evolve. Today’s speech by the RBNZ Governor could introduce volatility to the trading session, further impacting the currency’s movement.

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

29 May

Australian dollar hits 0.6650 amid mixed economic signals

By RoboForex Analytical Department

The AUD/USD pair rose to 0.6650 on Wednesday following the release of Australian economic data. Australia’s consumer price index (CPI) accelerated to 3.6% year-on-year in April, up from 3.5% in March. This slight increase in inflation could prompt questions about the Reserve Bank of Australia’s (RBA) future interest rate decisions.

Despite the uptick in inflation, it is unlikely to impact the RBA’s interest rate plans significantly. According to official forecasts, the RBA does not anticipate cutting rates before May of next year. The minutes from the latest RBA meeting indicated that while the Board was considering the possibility of a rate hike in May, it ultimately decided to maintain a stable monetary policy.

The RBA has expressed concerns that recent statistical data might sustain inflation above the target level for an extended period. However, the central bank’s current stance is to wait and see, suggesting that no immediate changes to its policy are planned in response to the latest inflation figures.

Moreover, recent retail sales data showed a marginal improvement of 0.1% month-on-month in April from a decline of 0.4% in March. Despite this positive change, the figures fell short of the anticipated 0.3% increase, disappointing the economic outlook.

Technical analysis of AUD/USD

On the H4 chart, the AUD/USD has completed a correction and is forming a new wave of decline towards the level of 0.6620. The formation of a consolidation range is expected once this level is reached. A downward exit from this range could lead to a further decline to 0.6580, the local target. A corrective move to 0.6626 (testing from below) may follow, then a decline to 0.6547. The downward trend target is the first one. The bearish indicator technically supports this MACD scenario, with its signal line above zero but directed downwards.

On the H1 chart, the AUD/USD is forming a decline structure to 0.6627. After reaching this level, a potential rise to 0.6650 could occur. Further decline to 0.6620 is also possible, and a breakdown below this level could open the potential for a decline to 0.6608, with the possibility of extending the trend to 0.6580. This scenario is technically confirmed by the Stochastic oscillator, with its signal line currently above 50 but expected to drop to 20, indicating a possible continuation of the downward trend.

Summary

Despite mixed economic indicators, the rise of the Australian dollar highlights the complex dynamics affecting the currency. The RBA’s cautious stance appears to be a significant factor in stabilising the AUD, even as inflation slightly increases. Technical analyses suggest a bearish short-term outlook, with the possibility of corrective movements. It is crucial for investors and traders to closely monitor these levels and stay abreast of global economic developments so they can adjust their strategies accordingly.

Disclaimer

Financial News Forex and Currency News

24 May

Week Ahead: USDJPY waits for fundamental spark

By ForexTime

Tokyo CPI & US PCE in focus

USDJPY 2% away from multi-decade top

Prices bullish but RSI near overbought

Bloomberg FX model – 77% USDJPY – (155.21 – 158.45)

Despite the holiday-shortened week ahead for the UK and US, markets could remain volatile due to top-tier data across the globe:

Monday, 27th May

UK and US markets closed
CN50: China industrial production
GER40: Germany IFO business climate
EU50: ECB chief economist Philip Lane speech

Tuesday, 28th May

AU200: Australia retail sales
US30: US Conference Board consumer confidence, Fed speech

Wednesday, 29th May

GER40: Germany CPI
ZAR: South African election
US500: Fed Beige Book, New York Fed President John Williams speech

Thursday, 30th May

EU50: Eurozone economic confidence, unemployment
ZAR: South Africa rate decision
SEK: Sweden GDP
CHF: Switzerland GDP
TWN: Taiwan GDP
US500: US initial jobless claims, GDP (Second Est), Fed speech

Friday, 31st May

CAD: Canada quarterly GDP
CN50: China official PMI’s
EUR: Eurozone CPI
JPY: Japan unemployment, Tokyo CPI, industrial production, retail sales
USDInd: US May PCE report, Atlanta Fed President Raphael Bostic speech

A few weeks ago, the yen was a hot talking point after staging a dramatic reversal against the dollar. This development fueled speculation about possible intervention by Japanese authorities after the currency weakened to a 34-year low.

Fast forward to today, the yen has given back most of its gains and is currently trading 2% away from its multi-decade top. Could another intervention be on the horizon if prices retest the 160.22 level?

The USDJPY could end May with a bang, and here are 3 reasons why:

1) Japan data dump

Incoming data from Japan could inject the yen with fresh volatility.

Much focus will be directed towards the latest CPI figures from Tokyo, unemployment, industrial production, and retail sales for insight into the health of Japan’s economy. This data dump may also influence expectations around when the Bank of Japan will proceed with another rate hike.

Traders are currently pricing in only a 27% probability of a 10-basis point hike by June with this jumping to 88% by July.

Should overall data support expectations around the BoJ hiking rates further, this could boost the yen.

A disappointing set of data that tempers bets around higher rates in Japan could weaken the yen.

2) US April PCE report

The Fed’s preferred inflation gauge – the Core Personal Consumption Expenditure is likely to influence rate cut expectations.

Recent data from the United States have eroded bets around the Fed cutting rates anytime soon.

Traders are pricing in a 60% probability of a 25-basis point cut by September with this jumping to 87% by November.

The PCE core deflator is forecast to remain unchanged at 0.3% month-over-month, with the same expected for its year-on-year print at 2.8%.

More signs of cooling price pressures may rekindle Fed cut bets, dragging the USDJPY lower as a result.

If the PCE report prints above market forecasts, this could support the “higher for longer” narrative – pushing the USDJPY higher as a result.

Note: Looking beyond the US PCE report, it will be wise to keep an eye on speeches by numerous Fed officials and other key US data points that may influence the dollar.

3) Technical forces

The USDJPY is trending higher on the daily timeframe as there have been consistently higher highs and higher lows. However, the Relative Strength Index is slowly approaching 70 – indicating that prices may be nearing overbought conditions.

– A solid breakout and daily close above 157.00 may open a path back towards 158.45.

– Should 157.00 prove to be reliable resistance, this may encourage a decline back towards 155.00.

Bloomberg’s FX model points to a 77% chance that USDJPY will trade within the 155.21 – 158.45 range over the next one-week period.

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

24 May

The Australian Dollar rapidly depreciates

By RoboForex Analytical Department

The AUD/USD pair has fallen rapidly in the final week, reaching 0.6592. This decline is primarily driven by the US dollar’s robust performance, following stronger-than-expected US economic data. Investors now speculate that the Federal Reserve may postpone any interest rate cuts.

The minutes from the Fed’s recent meeting have revealed concerns among policymakers about the possibility of high and persistent inflation. This has led some monetary committee members to express a readiness to tighten policy further if inflation continues to rise.

Similarly, the minutes from the Reserve Bank of Australia’s (RBA) recent meeting revealed doubts among local policymakers. Although the RBA considered raising interest rates in May, it ultimately decided to maintain the current policy stance. Meanwhile, domestic statistics showed that inflation expectations in Australia fell to 4.1% in May, the lowest level since October 2021.

Technical Analysis of AUD/USD

On the H4 chart of AUD/USD, a decline to 0.6663 was followed by a correction to 0.6780. Subsequently, a new wave of decline to 0.6580 has formed, serving as the local target. Upon reaching this target, a correction to 0.6630 (testing from below) is possible, followed by another decline to 0.6548. This target represents the initial objective of the downward trend wave. Technically, this scenario is confirmed by the MACD indicator, with its signal line above zero and pointing strictly downwards.

On the H1 chart, a consolidation range has formed around 0.6645. The downward exit from this range achieved the local target of 0.6607. The market has since corrected to 0.6646 (testing from below). Today, the decline wave to 0.6580 continues. After reaching this level, a consolidation range is expected to form around it. An upward exit from this range could lead to a correction to 0.6630. Conversely, a downward exit would open the potential for a further decline to 0.6540. This scenario is technically confirmed by the Stochastic oscillator, with its signal line below 20, indicating a potential beginning of a growth link to 50.

Summary

The Australian dollar’s depreciation is largely influenced by the strong US dollar and the cautious outlook of the Federal Reserve and the Reserve Bank of Australia. Technical indicators suggest further potential declines with possible corrective rebounds. Market participants should closely monitor these levels as economic conditions and policy expectations evolve.

Disclaimer

Financial News Forex and Currency News

22 May

The New Zealand Dollar shows a steady rise

By RoboForex Analytical Department

The NZD/USD pair is preparing for a mid-week rally, approaching the 0.6116 level. These current values mark the highest point for the Kiwi in two months, following the Reserve Bank of New Zealand’s decision to maintain its monetary policy structure unchanged during the May meeting.

The interest rate remains at 5.5% per annum, as anticipated.

The RBNZ has determined that maintaining a restrictive monetary policy is necessary to ensure inflation returns to target within the planned timeframe. The central bank has noted a cooling labour market and rising unemployment as potential risks. Support factors include higher housing rents, insurance costs, and increasing utility rates.

According to the official forecast, the consumer price index in New Zealand is expected to return to the 1-3% range by the end of 2024.

Overall, the NZD exchange rate is poised to increase. The RBNZ’s policy is viewed as balanced and consistent, which helps mitigate the risks of excessive volatility for the Kiwi.

On a broader scale, investors are awaiting the minutes from the latest US Federal Reserve meeting, which will provide further insights into the Fed’s upcoming steps.

NZD/USD technical analysis

On the H4 chart of NZD/USD, a consolidation range has formed around the 0.6000 level. Following an upward breakout, a growth wave to 0.6151 has been achieved. A consolidation range is currently emerging around 0.6114. A downward breakout from this range could open the potential for a decline to 0.6000, the first target. After reaching this level, a correction wave to 0.6075 (testing from below) is possible, followed by a further decline along the trend to 0.5853. This scenario is technically supported by the MACD indicator, with its signal line above zero but directed strictly downwards.

On the H1 chart, an impulse of decline to 0.6114 has formed. Today, the market might perform a correction to 0.6132. After this correction, the continuation of the growth wave to 0.6075 is expected, with the prospect of further trend development.

Summary

The NZD/USD pair is steadily rising, bolstered by the Reserve Bank of New Zealand’s consistent monetary policy. Technical indicators suggest potential corrections and further growth, with close attention to the upcoming US Federal Reserve minutes for additional market direction.

Disclaimer

Financial News Forex and Currency News

21 May

Euro/Dollar in consolidation

By RoboForex Analytical Department

The EUR/USD pair is gently declining towards 1.0858 on Tuesday but remains within a medium-term range.

This week sees few significant US statistics releases, which could provide investors with insights into future interest rate movements. However, numerous speeches from US Federal Reserve members are expected. Investors will be keenly listening for any indications about the Fed’s monetary policy.

On Monday, several Fed officials advocated for maintaining a cautious monetary policy strategy, despite last week’s data showing a reduction in inflationary pressures in April.

It is likely that all forthcoming comments from Fed officials will echo a similar sentiment—that the Fed remains patient and consistent. The Fed requires time to gather more data on easing price pressures. While there are indications of such easing, they are not yet systemic. This cautious approach has done little to alter investor expectations significantly. The market now anticipates that the Fed will lower rates twice before the end of the year, with the first cut expected in September.

EUR/USD technical analysis

On the H4 chart, EUR/USD has formed a consolidation range below the level of 1.0890. A downward exit from this range could lead to a continuation of the downward wave to 1.0784. Breaking this level might further extend the trend to 1.0683, which is the first target of the decline wave. This scenario is technically supported by the MACD indicator, with its signal line at the maximums while the histograms are below the zero mark and continue to decline.

On the H1 chart, the correction to 1.0883 has been completed. Currently, the structure of a downside wave to 1.0833 is forming. After reaching this level, a narrow consolidation range around it is expected. A downward exit from this range could open the potential for a further decline to 1.0785, which is the local target of the downward wave. This scenario is technically confirmed by the Stochastic oscillator, with its signal line below 80 and expected to decline to 20.

Summary

The EUR/USD pair remains in a consolidation phase with a gentle downward movement. Technical indicators suggest potential for further declines, but market participants will be closely watching Fed communications for any hints on future monetary policy, which could influence the pair’s direction.

Disclaimer

Financial News Forex and Currency News

19 May

Currency Speculators raise Euro & US Dollar bets into positive levels

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 May 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 Euro & Japanese Yen

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

Leading the gains for the currency markets was the EuroFX (12,565 contracts) with the Japanese Yen (8,740 contracts), the British Pound (1,738 contracts), the Swiss Franc (680 contracts), the Mexican Peso (649 contracts), Bitcoin (606 contracts) and the US Dollar Index (582 contracts) also having positive weeks.

The currencies seeing declines in speculator bets on the week were the Australian Dollar (-12,655 contracts), the Canadian Dollar (-11,082 contracts), the Brazilian Real (-616 contracts) and the New Zealand Dollar (-9 contracts) also registering lower bets on the week.

Currency Speculators raise Euro & US Dollar bets into positive levels

This week’s COT currency’s data saw a continued improvement in many currencies (EUR, USDIndex, GBP, JPY) that had seen their positions weakening significantly over the past few months. Overall, most of the currency positions remain in weak levels versus the US dollar as only the Mexican peso, the Euro and the USD Index currently have positive bullish speculator positions.

Here is this week’s COT currency roundup:

The Euro positions continue to rebound after a deeply negative stretch in March and April that took -84,396 contracts off the speculator position and dropped the Euro contracts into a bearish position for the first time since September of 2022. This week the Euro bets rose by +12,565 contracts following last week’s +11,367 contract gain and has brought the speculator standing to a current level of +17,155 contracts. The Euro exchange rate has been on a 5-week winning streak as well and closed this week at the 1.0889 level against the US dollar.

The US dollar index positions rose modestly again this week and have now been higher for six consecutive weeks. This recent bullishness has taken the speculator standing back into bullish territory after the position dipped into negative or bearish levels in March for the first time since 2021.

Japanese yen speculator bets continued to improve for a third straight week after falling to a multi-year low of -179,919 contracts on April 23rd. The three-week improvement has totaled +53,737 contracts and coincided with a reported intervention in the currency markets by the Japanese government to stop a sharp slide in the yen. Despite the intervention, the yen’s exchange rate versus the dollar continues to be historically weak with the USDJPY currency pair closing the week right around the 155.60 level.

The Canadian dollar speculative position dropped for a second straight week this week and the current -80,303 contract level is the most bearish standing in a month for the CAD bets. The renewed bearishness for speculators has brought the CAD into extreme bearishness versus its range over the past three years with a 1.9 percent strength score. The Canadian dollar exchange rate remains in a down-trending channel versus the US dollar with our weekly trend model also considering the CAD to be in a downtrend at the moment. However, the CADUSD currency pair has recently bounced off a base of support around the 0.7250 level for the fourth time since 2022.

The Mexican Peso saw a small weekly gain by just 649 contracts but this broke a four-week losing streak that saw a total of -27,379 contracts subtracted from the overall bullish position. Despite the recent weakness in positions, the MXN speculative position has remained the most bullish currency versus the US dollar and has maintained a speculator position above the +100,000 contract level for eleven consecutive weeks. This is the best +100,000 contract streak since late-2019 into early-2020. The MXN exchange rate versus the USD has been trending strongly higher over the past three weeks with a gain of approximately 4 percent in these three weeks and has now brought the exchange rate into positive territory year-to-date.

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 the Mexican Peso

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 Mexican Peso (87 percent) leads the currency markets this week. Bitcoin (64 percent) comes in as the next highest in the weekly strength scores.

On the downside, the Brazilian Real (0 percent), the Canadian Dollar (2 percent), the Swiss Franc (3 percent) and the US Dollar Index (10 percent) come in at the lowest strength levels currently and are in Extreme-Bearish territory (below 20 percent).

Strength Statistics:
US Dollar Index (10.0 percent) vs US Dollar Index previous week (8.8 percent)
EuroFX (27.6 percent) vs EuroFX previous week (22.3 percent)
British Pound Sterling (40.0 percent) vs British Pound Sterling previous week (38.8 percent)
Japanese Yen (33.6 percent) vs Japanese Yen previous week (28.1 percent)
Swiss Franc (2.6 percent) vs Swiss Franc previous week (1.4 percent)
Canadian Dollar (1.9 percent) vs Canadian Dollar previous week (10.3 percent)
Australian Dollar (28.5 percent) vs Australian Dollar previous week (40.3 percent)
New Zealand Dollar (28.6 percent) vs New Zealand Dollar previous week (28.6 percent)
Mexican Peso (86.9 percent) vs Mexican Peso previous week (86.6 percent)
Brazilian Real (0.0 percent) vs Brazilian Real previous week (0.7 percent)
Bitcoin (63.7 percent) vs Bitcoin previous week (54.6 percent)

Australian Dollar & 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 the Australian Dollar (24 percent) and the Japanese Yen (11 percent) lead the past six weeks trends for the currencies. The US Dollar Index (9 percent) is the next highest positive mover in the latest trends data.

The British Pound (-42 percent) leads the downside trend scores currently with the Brazilian Real (-39 percent), Swiss Franc (-33 percent) and the Canadian Dollar (-22 percent) following next with lower trend scores.

Strength Trend Statistics:
US Dollar Index (9.2 percent) vs US Dollar Index previous week (5.2 percent)
EuroFX (0.2 percent) vs EuroFX previous week (-11.3 percent)
British Pound Sterling (-42.1 percent) vs British Pound Sterling previous week (-37.8 percent)
Japanese Yen (10.7 percent) vs Japanese Yen previous week (-3.6 percent)
Swiss Franc (-33.4 percent) vs Swiss Franc previous week (-35.3 percent)
Canadian Dollar (-22.1 percent) vs Canadian Dollar previous week (-14.4 percent)
Australian Dollar (23.9 percent) vs Australian Dollar previous week (38.4 percent)
New Zealand Dollar (-10.4 percent) vs New Zealand Dollar previous week (-14.7 percent)
Mexican Peso (-10.2 percent) vs Mexican Peso previous week (-9.7 percent)
Brazilian Real (-39.4 percent) vs Brazilian Real previous week (-52.2 percent)
Bitcoin (-5.1 percent) vs Bitcoin previous week (4.4 percent)

Individual COT Forex Markets:

US Dollar Index Futures:

The US Dollar Index large speculator standing this week was a net position of 2,435 contracts in the data reported through Tuesday. This was a weekly boost of 582 contracts from the previous week which had a total of 1,853 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 10.0 percent. The commercials are Bullish-Extreme with a score of 92.7 percent and the small traders (not shown in chart) are Bearish with a score of 26.9 percent.

Price Trend-Following Model: Uptrend

Our weekly trend-following model classifies the current market price position as: 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:	69.3	19.8	8.3
– Percent of Open Interest Shorts:	63.6	28.6	5.1
– Net Position:	2,435	-3,790	1,355
– Gross Longs:	29,682	8,472	3,535
– Gross Shorts:	27,247	12,262	2,180
– Long to Short Ratio:	1.1 to 1	0.7 to 1	1.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	10.0	92.7	26.9
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	9.2	-7.3	-9.8

Euro Currency Futures:

The Euro Currency large speculator standing this week was a net position of 17,155 contracts in the data reported through Tuesday. This was a weekly boost of 12,565 contracts from the previous week which had a total of 4,590 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 27.6 percent. The commercials are Bullish with a score of 74.9 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 12.7 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.

EURO Currency Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	27.2	59.0	11.6
– Percent of Open Interest Shorts:	24.5	64.9	8.4
– Net Position:	17,155	-38,282	21,127
– Gross Longs:	178,398	387,812	76,472
– Gross Shorts:	161,243	426,094	55,345
– Long to Short Ratio:	1.1 to 1	0.9 to 1	1.4 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	27.6	74.9	12.7
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	0.2	-1.8	7.2

British Pound Sterling Futures:

The British Pound Sterling large speculator standing this week was a net position of -20,075 contracts in the data reported through Tuesday. This was a weekly lift of 1,738 contracts from the previous week which had a total of -21,813 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 40.0 percent. The commercials are Bullish with a score of 60.7 percent and the small traders (not shown in chart) are Bearish with a score of 46.5 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.

BRITISH POUND Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	21.8	61.8	11.6
– Percent of Open Interest Shorts:	30.8	49.8	14.6
– Net Position:	-20,075	26,795	-6,720
– Gross Longs:	48,674	137,917	25,869
– Gross Shorts:	68,749	111,122	32,589
– Long to Short Ratio:	0.7 to 1	1.2 to 1	0.8 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	40.0	60.7	46.5
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-42.1	37.1	-5.5

Japanese Yen Futures:

The Japanese Yen large speculator standing this week was a net position of -126,182 contracts in the data reported through Tuesday. This was a weekly rise of 8,740 contracts from the previous week which had a total of -134,922 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 33.6 percent. The commercials are Bullish with a score of 71.7 percent and the small traders (not shown in chart) are Bullish with a score of 60.3 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.

JAPANESE YEN Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	11.9	72.7	13.3
– Percent of Open Interest Shorts:	54.3	27.9	15.6
– Net Position:	-126,182	133,294	-7,112
– Gross Longs:	35,303	216,442	39,446
– Gross Shorts:	161,485	83,148	46,558
– Long to Short Ratio:	0.2 to 1	2.6 to 1	0.8 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	33.6	71.7	60.3
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	10.7	-3.8	-34.1

Swiss Franc Futures:

The Swiss Franc large speculator standing this week was a net position of -41,107 contracts in the data reported through Tuesday. This was a small weekly advance of 680 contracts from the previous week which had a total of -41,787 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 2.6 percent. The commercials are Bullish-Extreme with a score of 90.2 percent and the small traders (not shown in chart) are Bearish with a score of 28.8 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:	7.3	79.1	12.3
– Percent of Open Interest Shorts:	52.6	22.0	24.0
– Net Position:	-41,107	51,769	-10,662
– Gross Longs:	6,646	71,745	11,121
– Gross Shorts:	47,753	19,976	21,783
– Long to Short Ratio:	0.1 to 1	3.6 to 1	0.5 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	2.6	90.2	28.8
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-33.4	19.6	25.7

Canadian Dollar Futures:

The Canadian Dollar large speculator standing this week was a net position of -80,303 contracts in the data reported through Tuesday. This was a weekly decrease of -11,082 contracts from the previous week which had a total of -69,221 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 1.9 percent. The commercials are Bullish-Extreme with a score of 92.3 percent and the small traders (not shown in chart) are Bearish with a score of 28.1 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:	15.5	66.8	14.7
– Percent of Open Interest Shorts:	51.9	31.4	13.8
– Net Position:	-80,303	78,220	2,083
– Gross Longs:	34,286	147,626	32,492
– Gross Shorts:	114,589	69,406	30,409
– Long to Short Ratio:	0.3 to 1	2.1 to 1	1.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	1.9	92.3	28.1
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-22.1	14.8	7.6

Australian Dollar Futures:

The Australian Dollar large speculator standing this week was a net position of -77,171 contracts in the data reported through Tuesday. This was a weekly drop of -12,655 contracts from the previous week which had a total of -64,516 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 28.5 percent. The commercials are Bullish with a score of 69.0 percent and the small traders (not shown in chart) are Bullish with a score of 58.7 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.

AUSTRALIAN DOLLAR Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	19.9	65.2	12.8
– Percent of Open Interest Shorts:	58.1	27.0	12.8
– Net Position:	-77,171	77,142	29
– Gross Longs:	40,059	131,596	25,881
– Gross Shorts:	117,230	54,454	25,852
– Long to Short Ratio:	0.3 to 1	2.4 to 1	1.0 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	28.5	69.0	58.7
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	23.9	-28.3	31.2

New Zealand Dollar Futures:

The New Zealand Dollar large speculator standing this week was a net position of -11,200 contracts in the data reported through Tuesday. This was a weekly dip of just -9 contracts from the previous week which had a total of -11,191 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 28.6 percent. The commercials are Bullish with a score of 70.3 percent and the small traders (not shown in chart) are Bearish with a score of 41.8 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:	34.7	58.3	6.6
– Percent of Open Interest Shorts:	54.8	36.5	8.3
– Net Position:	-11,200	12,162	-962
– Gross Longs:	19,284	32,451	3,683
– Gross Shorts:	30,484	20,289	4,645
– Long to Short Ratio:	0.6 to 1	1.6 to 1	0.8 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	28.6	70.3	41.8
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-10.4	3.6	28.4

Mexican Peso Futures:

The Mexican Peso large speculator standing this week was a net position of 112,961 contracts in the data reported through Tuesday. This was a weekly advance of 649 contracts from the previous week which had a total of 112,312 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 86.9 percent. The commercials are Bearish-Extreme with a score of 13.3 percent and the small traders (not shown in chart) are Bearish with a score of 34.4 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.

MEXICAN PESO Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	55.9	41.0	2.7
– Percent of Open Interest Shorts:	12.1	86.2	1.3
– Net Position:	112,961	-116,601	3,640
– Gross Longs:	144,307	105,840	6,997
– Gross Shorts:	31,346	222,441	3,357
– Long to Short Ratio:	4.6 to 1	0.5 to 1	2.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	86.9	13.3	34.4
– Strength Index Reading (3 Year Range):	Bullish-Extreme	Bearish-Extreme	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-10.2	10.9	-13.2

Brazilian Real Futures:

The Brazilian Real large speculator standing this week was a net position of -38,259 contracts in the data reported through Tuesday. This was a weekly reduction of -616 contracts from the previous week which had a total of -37,643 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 with a score of 34.5 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.

BRAZIL REAL Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	18.3	78.2	3.4
– Percent of Open Interest Shorts:	80.7	15.9	3.4
– Net Position:	-38,259	38,249	10
– Gross Longs:	11,257	47,983	2,105
– Gross Shorts:	49,516	9,734	2,095
– Long to Short Ratio:	0.2 to 1	4.9 to 1	1.0 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	0.0	100.0	34.5
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-39.4	40.6	-17.6

Bitcoin Futures:

The Bitcoin large speculator standing this week was a net position of -177 contracts in the data reported through Tuesday. This was a weekly rise of 606 contracts from the previous week which had a total of -783 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 63.7 percent. The commercials are Bullish with a score of 54.0 percent and the small traders (not shown in chart) are Bearish with a score of 26.5 percent.

Price Trend-Following Model: Uptrend

Our weekly trend-following model classifies the current market price position as: 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:	77.8	4.1	5.6
– Percent of Open Interest Shorts:	78.5	5.6	3.4
– Net Position:	-177	-421	598
– Gross Longs:	21,078	1,099	1,519
– Gross Shorts:	21,255	1,520	921
– Long to Short Ratio:	1.0 to 1	0.7 to 1	1.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	63.7	54.0	26.5
– Strength Index Reading (3 Year Range):	Bullish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-5.1	14.9	-5.7

Article By InvestMacro – Receive our weekly COT Newsletter

COT Updates Forex and Currency News Opinions

17 May

Week Ahead: GBPNZD braces for double risk cocktail

By ForexTime

RBNZ decision & UK CPI in focus

NZD best performing G10 currency MTD

GBPNZD trapped in 1500 pip range

Prices bearish on D1 charts

Bloomberg FX model: 76% GBPNZD – (2.0510 – 2.0924)

High impact events ranging from central bank decisions, key inflation data and speeches by policymakers may present fresh trading opportunities in the week ahead:

Sunday, 19th May

USDInd: Fed Chair Jerome Powell speech

Monday, 20th May

CN50: China loan prime rates
HK50: Hong Kong jobless rates
JPY: Japan tertiary industry index
TWN: Taiwan export orders
SEK: Riksbank Governor Erik Thedeen speech
US500: Fed speeches

Tuesday, 21st May

AU200: Australia consumer confidence, RBA minutes
CAD: Canada CPI
NGN: Nigeria rate decision
US30: Fed speeches

Wednesday, 22nd May

JP225: Japan core machinery orders, trade
NZD: RBNZ rate decision
ZAR: South Africa CPI
TWN: Taiwan jobless rate
GBP: UK April CPI
USDInd: FOMC minutes
NAS100: Nvidia earnings

Thursday, 23rd May

EU50: Eurozone PMI’s, consumer confidence
GER40: Germany manufacturing PMI
HK50: Hong Kong CPI
SG20: Singapore CPI, GDP
TWN: Taiwan industrial production
UK100: UK Manufacturing PMI

Friday, 24th May

CAD: Canada retail sales
GER40: Germany GDP
JP225: Japan CPI
NGN: Nigeria GDP
CHF: SNB President Thomas Jordan speech
SG20: Singapore industrial production
USDInd: US University of Michigan consumer sentiment

Our attention falls on the GBPNZD which has been trapped within a 1500-pip monthly range since August 2023.

Note: GBPNZD is a minor currency pair – one that does not include the USD but has at least one of the world’s majors.

However, prices have trended lower over the past few weeks. This could be based on shifting expectations over the Bank of England (BoE) and Reserve Bank of New Zealand’s (RBNZ) next policy move.

Interestingly, Sterling is down against most G10 currencies month-to-date.

But the New Zealand dollar is flexing its muscles across the board.

Keep all the above in mind, here are 3 factors that could rock the GBPNZD.

1) New Zealand rate decision

The Reserve Bank of New Zealand (RBNZ) is expected to leave rates unchanged at 5.5% next week.

So, investors will direct their attention toward the policy statement and media conference for clues on future policy moves. It is noteworthy that first-quarter inflation printed hotter than expected, injecting RBNZ hawks with fresh inspiration. Any more hawkish hints during the meeting may further push back bets around when the central bank will start cutting rates.

Traders currently see a 50% probability of a 25-basis point RBNZ cut by August with this jumping to roughly 95% by October.

The GBPNZD could sink lower if the RBNZ strikes a hawkish note and suggests that rates will remain higher for longer.

If the central bank signals lower rates down the road, this could push the GBPNZD higher.

2) UK April CPI report

The incoming UK April inflation report will likely impact bets around when the Bank of England will start cutting interest rates.

Markets are forecasting:

CPI year-on-year (April 2023 vs. April 2024) to cool 2.1% from 3.2% in the prior month.
Core CPI year-on-year to cool to 3.6% to 4.2%.
CPI month-on-month (April 2024 vs March 2024) to cool 0.2% from 0.6%.

Headline inflation is expected to cool significantly with core inflation figures tagging along. A drop in household energy prices over the past year is expected to be the main driver behind this. Should the CPI report match or even print lower than these expectations, it may encourage the BoE to cut rates sooner than expected.

Traders see a 62% probability of a 25-basis point BoE cut by June with a move in August fully priced in.

A soft UK inflation report could send the GBPNZD lower as sterling weakens.

Should the CPI report print above market forecasts, the GBPNZD may push higher.

3) Technical forces

Prices are under pressure on the weekly charts, currently testing the 50-week SMA and bullish channel. A solid breakdown below the 2.0700 could signal further downside.

Zooming into the daily, there have been consistently lower lows and lower highs. Prices are trading below the 50, 100 and 200-day SMA while the MACD trades below zero.

Sustained weakness below 2.0775 may open a path back towards 2.0500.

Should prices push back above the 200-day SMA, this could open a path back to 2.0900.

Bloomberg FX model now forecasts a 76% chance that GBPNZD will trade within the 2.0510 – 2.0924 range through next week.

Article by ForexTime

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

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