Forex and Currency News

Archive for Forex and Currency News – Page 18

US dollar exhibits remarkable strength amid global tensions

By RoboForex Analytical Department

The EUR/USD pair has experienced a notable decline, currently stabilising around 1.0648. Last week, the pair recorded its most significant weekly gain since 2022, fuelled by the anticipation of persistently high interest rates in the US and escalated conflicts in the Middle East.

The US dollar appreciated by 1.6% over the week against a basket of six major currencies, reaching another 34-year high against the Japanese yen and experiencing its most substantial weekly increase against the British pound since July 2023.

Recent US inflation data and the Federal Reserve’s cautious stance have tempered expectations for substantial interest rate cuts this year. Initially, six cuts were anticipated at the start of the year, reduced to three in early April, and now just two cuts are forecasted. In contrast, European monetary authorities have hinted at potential rate cuts within the coming months.

Market expectations for the first Fed rate cut have shifted from June to September, reflecting ongoing concerns about inflation and uncertainty about whether the economic environment will support easing monetary policies soon. Additionally, the disputes in the Middle East have bolstered the safe-haven appeal of the US dollar, further supporting its strength.

EUR/USD technical analysis

On the H4 chart of EUR/USD, the pair formed a consolidation range around 1.0733 before beginning a downward wave to 1.0622. A new consolidation range is currently forming above this level. An upward exit from this range could lead to a corrective move towards 1.0733. Conversely, a downward exit might signal a continuation of the decline to 1.0585. The MACD indicator, with its signal line below zero and directed downwards, supports this bearish scenario.

The H1 chart shows ongoing development in the downward wave towards 1.0585. After completing a rise to 1.0622, the market is currently correcting to 1.0660. Following this correction, a further decline to 1.0585 is anticipated. This bearish outlook is confirmed by the Stochastic oscillator, currently above 80, with an expected fall to the 20 mark, indicating potential for further declines.

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

14 Apr

Speculators push Japanese Yen bearish bets to highest since 2007

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 April 9th 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 & Australian Dollar

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

Leading the gains for the currency markets was the EuroFX (15,929 contracts) with the Australian Dollar (10,344 contracts), the Mexican Peso (5,961 contracts), the US Dollar Index (754 contracts) and the Brazilian Real (645 contracts) also showing positive weeks.

The currencies seeing declines in speculator bets on the week were the Japanese Yen (-18,921 contracts), the British Pound (-15,162 contracts), the Swiss Franc (-9,394 contracts), the New Zealand Dollar (-6,019 contracts), the Canadian Dollar (-2,162 contracts) and Bitcoin (-313 contracts) also registering lower bets on the week.

Speculators push Japanese Yen bearish bets to highest since 2007

Highlighting the COT currency’s data this week is recent sharp increase in bearish bets for the Japanese yen speculators. Large speculative yen positions fell for a fourth straight week this week and have declined by a total of -59,829 contracts over these last four weeks.

This week’s yen net position of -162,151 contracts marks the most bearish level since July 26th of 2007 (near the beginning of the Global Financial Crisis) when the net positions were all the way down to -188,077 contracts. The yen speculative position has now been over the -100,000 contract level for nine straight weeks and, overall, the speculator standing has been in a continuous bearish level since March of 2021. This amounts to a total of 161 straight weeks of bearish positions.

The Bank of Japan (BOJ) recently ended its negative interest rate policy in March but that only provided a small, short-lived bump to the yen. Since then, the yen exchange rate has experienced very sharp weakness and has now hit a new 34-year low versus the US Dollar. The USD/JPY currency pair (higher USD/JPY is dollar strength/yen weakness) rose to the 153.20 exchange rate to close the week and is now at the highest level since June of 1990. The USD/JPY is up by almost 9 percent since the beginning of the year and has prompted warnings that the BOJ may look to intervene to halt their fast-sliding currency.

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 (100 percent) and the British Pound (72 percent) lead the currency markets this week. Bitcoin (64 percent) comes in as the next highest in the weekly strength scores.

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

Strength Statistics:
US Dollar Index (2.5 percent) vs US Dollar Index previous week (0.9 percent)
EuroFX (34.2 percent) vs EuroFX previous week (27.5 percent)
British Pound Sterling (72.0 percent) vs British Pound Sterling previous week (82.1 percent)
Japanese Yen (0.0 percent) vs Japanese Yen previous week (13.3 percent)
Swiss Franc (0.0 percent) vs Swiss Franc previous week (20.7 percent)
Canadian Dollar (14.3 percent) vs Canadian Dollar previous week (16.1 percent)
Australian Dollar (13.7 percent) vs Australian Dollar previous week (4.4 percent)
New Zealand Dollar (21.9 percent) vs New Zealand Dollar previous week (39.0 percent)
Mexican Peso (100.0 percent) vs Mexican Peso previous week (97.1 percent)
Brazilian Real (30.8 percent) vs Brazilian Real previous week (30.0 percent)
Bitcoin (64.1 percent) vs Bitcoin previous week (68.8 percent)

Bitcoin & Mexican Peso top the 6-Week Strength Trends

COT Strength Score Trends (or move index, calculates the 6-week changes in strength scores) showed that Bitcoin (27 percent) and the Mexican Peso (23 percent) lead the past six weeks trends for the currencies and are the only two markets with positive trends this week.

The New Zealand Dollar (-67 percent) leads the downside trend scores currently with the Canadian Dollar (-44 percent), Swiss Franc (-44 percent) and the Brazilian Real (-26 percent) following next with lower trend scores.

Strength Trend Statistics:
US Dollar Index (-6.8 percent) vs US Dollar Index previous week (-7.3 percent)
EuroFX (-12.8 percent) vs EuroFX previous week (-21.8 percent)
British Pound Sterling (-12.0 percent) vs British Pound Sterling previous week (-1.9 percent)
Japanese Yen (-20.7 percent) vs Japanese Yen previous week (-15.8 percent)
Swiss Franc (-43.7 percent) vs Swiss Franc previous week (-27.5 percent)
Canadian Dollar (-43.6 percent) vs Canadian Dollar previous week (-42.3 percent)
Australian Dollar (-11.9 percent) vs Australian Dollar previous week (-18.8 percent)
New Zealand Dollar (-67.0 percent) vs New Zealand Dollar previous week (-40.2 percent)
Mexican Peso (22.5 percent) vs Mexican Peso previous week (18.5 percent)
Brazilian Real (-26.2 percent) vs Brazilian Real previous week (-25.8 percent)
Bitcoin (27.3 percent) vs Bitcoin previous week (34.0 percent)

Individual COT Forex Markets:

US Dollar Index Futures:

The US Dollar Index large speculator standing this week totaled a net position of -1,142 contracts in the data reported through Tuesday. This was a weekly boost of 754 contracts from the previous week which had a total of -1,896 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 2.5 percent. The commercials are Bullish-Extreme with a score of 99.7 percent and the small traders (not shown in chart) are Bearish with a score of 29.5 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.

US DOLLAR INDEX Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	66.1	22.7	8.9
– Percent of Open Interest Shorts:	68.9	23.8	5.1
– Net Position:	-1,142	-430	1,572
– Gross Longs:	26,733	9,194	3,617
– Gross Shorts:	27,875	9,624	2,045
– Long to Short Ratio:	1.0 to 1	1.0 to 1	1.8 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	2.5	99.7	29.5
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-6.8	6.1	3.9

Euro Currency Futures:

The Euro Currency large speculator standing this week totaled a net position of 32,723 contracts in the data reported through Tuesday. This was a weekly rise of 15,929 contracts from the previous week which had a total of 16,794 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 34.2 percent. The commercials are Bullish with a score of 69.7 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 9.8 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:	27.3	59.5	11.7
– Percent of Open Interest Shorts:	22.2	67.6	8.7
– Net Position:	32,723	-52,032	19,309
– Gross Longs:	175,419	383,114	75,049
– Gross Shorts:	142,696	435,146	55,740
– Long to Short Ratio:	1.2 to 1	0.9 to 1	1.3 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	34.2	69.7	9.8
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-12.8	14.2	-12.3

British Pound Sterling Futures:

The British Pound Sterling large speculator standing this week totaled a net position of 28,252 contracts in the data reported through Tuesday. This was a weekly lowering of -15,162 contracts from the previous week which had a total of 43,414 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 72.0 percent. The commercials are Bearish with a score of 30.5 percent and the small traders (not shown in chart) are Bullish with a score of 55.7 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: New Sell – Short Position.

BRITISH POUND Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	37.9	45.5	13.2
– Percent of Open Interest Shorts:	24.5	58.3	13.7
– Net Position:	28,252	-27,055	-1,197
– Gross Longs:	80,000	96,196	27,814
– Gross Shorts:	51,748	123,251	29,011
– Long to Short Ratio:	1.5 to 1	0.8 to 1	1.0 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	72.0	30.5	55.7
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-12.0	13.7	-12.6

Japanese Yen Futures:

The Japanese Yen large speculator standing this week totaled a net position of -162,151 contracts in the data reported through Tuesday. This was a weekly decline of -18,921 contracts from the previous week which had a total of -143,230 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 Bullish-Extreme with a score of 98.9 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:	14.6	67.6	15.7
– Percent of Open Interest Shorts:	64.5	19.2	14.1
– Net Position:	-162,151	156,942	5,209
– Gross Longs:	47,275	219,256	50,941
– Gross Shorts:	209,426	62,314	45,732
– Long to Short Ratio:	0.2 to 1	3.5 to 1	1.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	0.0	100.0	98.9
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-20.7	17.9	14.1

Swiss Franc Futures:

The Swiss Franc large speculator standing this week totaled a net position of -31,764 contracts in the data reported through Tuesday. This was a weekly decrease of -9,394 contracts from the previous week which had a total of -22,370 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 Bearish-Extreme with a score of 0.0 percent. The commercials are Bullish-Extreme with a score of 100.0 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 3.1 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.

SWISS FRANC Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	18.3	71.2	10.5
– Percent of Open Interest Shorts:	53.3	18.3	28.5
– Net Position:	-31,764	48,083	-16,319
– Gross Longs:	16,626	64,665	9,535
– Gross Shorts:	48,390	16,582	25,854
– Long to Short Ratio:	0.3 to 1	3.9 to 1	0.4 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	0.0	100.0	3.1
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-43.7	43.2	-20.9

Canadian Dollar Futures:

The Canadian Dollar large speculator standing this week totaled a net position of -53,385 contracts in the data reported through Tuesday. This was a weekly lowering of -2,162 contracts from the previous week which had a total of -51,223 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 14.3 percent. The commercials are Bullish-Extreme with a score of 87.9 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 11.8 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.

CANADIAN DOLLAR Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	18.0	66.3	14.1
– Percent of Open Interest Shorts:	45.7	36.1	16.7
– Net Position:	-53,385	58,340	-4,955
– Gross Longs:	34,741	127,944	27,190
– Gross Shorts:	88,126	69,604	32,145
– Long to Short Ratio:	0.4 to 1	1.8 to 1	0.8 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	14.3	87.9	11.8
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-43.6	36.8	-15.3

Australian Dollar Futures:

The Australian Dollar large speculator standing this week totaled a net position of -92,341 contracts in the data reported through Tuesday. This was a weekly lift of 10,344 contracts from the previous week which had a total of -102,685 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 88.5 percent and the small traders (not shown in chart) are Bearish with a score of 30.9 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.

AUSTRALIAN DOLLAR Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	14.6	72.5	10.3
– Percent of Open Interest Shorts:	58.8	23.8	14.8
– Net Position:	-92,341	101,610	-9,269
– Gross Longs:	30,556	151,421	21,567
– Gross Shorts:	122,897	49,811	30,836
– Long to Short Ratio:	0.2 to 1	3.0 to 1	0.7 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	13.7	88.5	30.9
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-11.9	8.6	3.4

New Zealand Dollar Futures:

The New Zealand Dollar large speculator standing this week totaled a net position of -13,547 contracts in the data reported through Tuesday. This was a weekly fall of -6,019 contracts from the previous week which had a total of -7,528 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 21.9 percent. The commercials are Bullish-Extreme with a score of 80.3 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 19.5 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.

NEW ZEALAND DOLLAR Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	24.4	70.2	5.1
– Percent of Open Interest Shorts:	48.5	41.4	9.9
– Net Position:	-13,547	16,239	-2,692
– Gross Longs:	13,726	39,515	2,862
– Gross Shorts:	27,273	23,276	5,554
– Long to Short Ratio:	0.5 to 1	1.7 to 1	0.5 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	21.9	80.3	19.5
– Strength Index Reading (3 Year Range):	Bearish	Bullish-Extreme	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-67.0	70.0	-65.2

Mexican Peso Futures:

The Mexican Peso large speculator standing this week totaled a net position of 139,691 contracts in the data reported through Tuesday. This was a weekly boost of 5,961 contracts from the previous week which had a total of 133,730 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 Bearish with a score of 41.6 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.

MEXICAN PESO Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	61.3	35.9	2.5
– Percent of Open Interest Shorts:	16.2	82.6	1.0
– Net Position:	139,691	-144,453	4,762
– Gross Longs:	189,880	111,158	7,836
– Gross Shorts:	50,189	255,611	3,074
– Long to Short Ratio:	3.8 to 1	0.4 to 1	2.5 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	100.0	0.0	41.6
– Strength Index Reading (3 Year Range):	Bullish-Extreme	Bearish-Extreme	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	22.5	-21.7	-2.0

Brazilian Real Futures:

The Brazilian Real large speculator standing this week totaled a net position of -2,616 contracts in the data reported through Tuesday. This was a weekly rise of 645 contracts from the previous week which had a total of -3,261 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 30.8 percent. The commercials are Bullish with a score of 67.8 percent and the small traders (not shown in chart) are Bullish with a score of 53.9 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.

BRAZIL REAL Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	61.4	31.9	6.3
– Percent of Open Interest Shorts:	66.2	31.0	2.4
– Net Position:	-2,616	531	2,085
– Gross Longs:	33,440	17,384	3,418
– Gross Shorts:	36,056	16,853	1,333
– Long to Short Ratio:	0.9 to 1	1.0 to 1	2.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	30.8	67.8	53.9
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-26.2	25.7	0.2

Bitcoin Futures:

The Bitcoin large speculator standing this week totaled a net position of -153 contracts in the data reported through Tuesday. This was a weekly reduction of -313 contracts from the previous week which had a total of 160 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 64.1 percent. The commercials are Bearish with a score of 43.4 percent and the small traders (not shown in chart) are Bearish with a score of 35.5 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:	81.1	5.3	5.8
– Percent of Open Interest Shorts:	81.6	8.2	2.4
– Net Position:	-153	-838	991
– Gross Longs:	23,572	1,544	1,699
– Gross Shorts:	23,725	2,382	708
– Long to Short Ratio:	1.0 to 1	0.6 to 1	2.4 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	64.1	43.4	35.5
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	27.3	-45.8	-0.4

Article By InvestMacro – Receive our weekly COT Newsletter

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

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

12 Apr

Australian dollar struggles amid robust US economic data

By RoboForex Analytical Department

The AUD/USD pair remains under pressure, hovering around 0.6528 on Friday. Earlier this week, the Australian dollar faced significant challenges, with a sharp decline against the USD. Efforts to stabilise the exchange rate have seen limited success thus far.

The stronger-than-expected economic data from the US has dampened hopes for extensive interest rate cuts by the Federal Reserve this year. The capital market currently anticipates only a 40-basis point reduction, a downgrade from the 60-75 basis points expected at the start of the week.

The Reserve Bank of Australia (RBA) is considering initiating its monetary easing policies towards the end of 2024. However, Australia’s robust employment market and persistent consumer inflation complicate these plans. Recent data indicates that the unemployment rate dropped to 3.7% in February, the lowest since September 2023, while inflation remained steady at 3.4% for the third consecutive month.

A recent Westpac report highlights the RBA’s need for greater confidence in the inflation outlook before seriously contemplating a rate cut.

Technical analysis of AUD/USD

On the H4 chart, the AUD/USD is developing the fifth wave of decline towards 0.6832. The market has recently experienced a decline to 0.6498. A consolidation range is forming above this level today. If the pair exits this range upward, a corrective move to 0.6570 may occur. Conversely, a downward exit could lead to the continuation of the downward wave towards 0.6404. The MACD indicator supports this bearish outlook, with its signal line above zero but trending downwards sharply.

The H1 chart shows a consolidation around 0.6523. An upward breakout could lead to a correction towards 0.6570. A downward move from the range could initiate a further decline to 0.6420, potentially extending to 0.6404. The Stochastic oscillator, currently below 20, suggests a possible rise to 50, indicating potential short-term corrections within a broader downward trend.

Disclaimer

Financial News Forex and Currency News

11 Apr

US Dollar strengthens following high inflation data

By RoboForex Analytical Department

The EUR/USD pair has experienced a significant decline, stabilising around 1.0745 by Thursday. This movement follows the US releasing inflation data that exceeded expectations, underscoring the ongoing battle against inflation. The March consumer price index (CPI) increased by 0.4% month-on-month, matching February’s rise but surpassing the anticipated 0.3%. The annual inflation rate intensified to 3.5% from 3.2%, signalling persistent inflationary pressures.

Core inflation, which excludes volatile food and energy prices, also climbed by 0.4% in March, maintaining a year-on-year core 3.8% core CPI. Such elevated inflation levels suggest that the Federal Reserve might delay interest rate cuts, a sentiment reflected in the CME’s FedWatch tool. The likelihood of a rate reduction in June sharply declined to 18% post-CPI announcement, representing a significant drop from the 50% probability seen before the data release. Expectations now lean towards September for potential Federal Reserve actions.

Market predictions have adjusted to foresee a 43-45 basis point rate cut by the Fed within this year, a sharp decline from the 75 basis points expected at the week’s start and the 150 basis points anticipated at the year’s beginning. The minutes from the Federal Reserve’s recent meeting further solidified concerns, revealing policymakers’ dissatisfaction with inflation trends even before the latest price statistics.

This series of developments has bolstered the US dollar’s strength in the currency market.

EUR/USD technical analysis

The H4 chart analysis for EUR/USD shows a correction to 1.0883, followed by a downturn to 1.0728 on the back of the recent news. A consolidation range has currently formed around this level, with a potential rise to 1.0784. A downward breakout from this range could lead to a decrease towards 1.0700. The MACD indicator, positioned below zero and trending downward, supports this potential scenario.

On the H1 chart, the downward trend towards 1.0700 continues, with a possible correction to 1.0780 expected. This may be followed by a further drop to 1.0680, representing an initial phase of a broader downtrend. The Stochastic oscillator, currently below 80, anticipates a continued decline towards 20, reinforcing the bearish outlook for the EUR/USD pair.

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Financial News Forex and Currency News

10 Apr

NZD is G10’s best-performer so far today. But will it last?

By ForexTime

Markets boosted the “kiwi” after “hawkish” RBNZ signals
More action expected with US CPI, FOMC minutes to be released
Softer US inflation may boost NZDUSD by further 700 points
Still-elevated CPI may force NZDUSD to fall by some 200-400 points

The Kiwi is currently the best-performing G10 currency against the US dollar!

NZDUSD surged after the Reserve Bank of New Zealand (RBNZ) left its Official Cash Rate unchanged at 5.5%, as widely expected.

More importantly for Kiwi bulls (those hoping that NZDUSD would go higher) …

the RBNZ said that its policy needs to be “restrictive for a sustained period”.

And as we know, markets tend to reward the currency of the economy whose interest rates can stay higher for longer.

Following the RBNZ decision, NZDUSD a.k.a the “kiwi” saw a price movement range of over 300 points rallying to a high of 0.60774.

This psychological 0.60700 level will be closely monitored ahead of today’s US CPI release!

The US consumer price index (CPI) measures the rate of inflation, that is, the changes in the prices of a basket of goods and services over a period, in the United States.

The incoming data is expected to show:

Headline CPI in March 2024 vs. March 2023 (year-on-year): 3.4%
If that is the case, that 3.4% would be higher than February’s 3.2% year-on-year figure
Headline CPI in March 2024 vs. February 2024 (month-on-month): 0.3%
If that is the case, that 0.3% would be lower than February’s 0.4% month-on-month figure
Core CPI (excluding food and energy prices) year-on-year: 3.7%
If that is the case, that 3.7% would be lower than February’s 3.8% year-on-year figure
Core CPI month-on-month: 0.3%
If that is the case, that 0.3% would be lower than February’s 0.4% month-on-month figure.

POTENTIAL SCENARIOS:

A hotter-than-expected US CPI report may be seen as bullish for the US dollar, likely dragging NZDUSD lower.
A softer-than-expected US CPI report may be interpreted as bearish for the greenback, perhaps even lifting NZDUSD past its 50-day SMA (simple moving average).

But wait, there’s more …

More FX volatility could be expected after the US CPI announcement.

The FOMC’s March meeting minutes are due to be released at 6:00 pm GMT today (Wednesday, April 10th).

NZDUSD may move lower if the FOMC minutes show that the US central bank is less convinced about the prospects of 75-basis points in cuts for this year, instead preferring fewer rate cuts.
However, NZDUSD could be given a boost if policymakers have greater confidence (more than they’ve conveyed to the public so far) that they can follow through with the 75-basis points of rate cuts pencilled in last month.

Looking at the chart above …

NZDUSD has rallied for over 1300 points from its year-to-date low at 0.59391.

A surprisingly soft US CPI, with the year-on-year figures close to 3%, may turbocharge the “kiwi” upwards by a further 700 points!

This could send NZDUSD to an upper trendline resistance around 0.61382!

Possible near-term resistance:

0.60839: the 100% Fibonacci level which is the current zone of the 50-day simple moving average (SMA)

The Fibonacci retracement levels are taken from the December 13th low at 0.60839 to the December 28th high at 0.63692.

On hotter-than-expected US CPI data, the US dollar may strengthen, which sets Kiwi up for a decline.

Possible near-term support can be seen at

0.60506: an important price level, and upward trendline on the 4-hour timeframe.
0.60319: the 21-day SMA

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

10 Apr

EUR/USD holds steady ahead of key economic updates

By RoboForex Analytical Department

The EUR/USD pair is maintaining a neutral stance, trading around 1.0851 on Wednesday, as the market anticipates crucial updates, including the US inflation data for March and the outcome of the European Central Bank (ECB) meeting on Thursday. Given the significant events on the horizon, investors are exhibiting caution.

The US inflation rate for March is anticipated to show a 0.3% month-on-month increase, slightly below February’s 0.4% rise. The core Consumer Price Index (CPI) is also expected to grow by 0.3% month-on-month. The market consensus leans towards the US Federal Reserve reducing its interest rate by 75 basis points throughout 2024, indicating three separate 25-point cuts.

Despite the increase in yields on US government bonds since the start of the year, the US dollar’s reaction has been relatively subdued, with only a 2.5% appreciation against a 47-basis point widening in benchmark bond yields. This disparity suggests that the US dollar may play catch-up with Treasury yields, or bond yields might decrease to close the gap. This raises questions about the timing of this adjustment.

The ECB’s interest rate is expected to remain at 4.5% per annum, with the European regulator likely to wait for the Fed’s move towards easing monetary policy before making its adjustments. This approach is taken even though the eurozone has effectively managed high inflation ahead of other developed economies, theoretically positioning it to adapt its monetary policy sooner.

Technical analysis of EUR/USD

The H4 chart analysis of EUR/USD indicates a correction wave to 1.0883 followed by a decrease to 1.0844. A narrow consolidation range has formed above this level, potentially leading to a correction towards 1.0904 before a new decline towards 1.0790, with a continuation to 1.0700 as a possible target. The MACD indicator, with its signal line above zero and the histogram declining, suggests a potential sharp decrease.

The H1 chart shows a consolidation range of around 1.0850, extending to 1.0884. The market has returned to 1.0843, with the possibility of another correction wave to 1.0904 before a downward movement to 1.0790. The Stochastic oscillator, currently below 50, indicates a continuation of the decline towards 20, supporting the bearish scenario.

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Financial News Forex and Currency News

09 Apr

Yen weakens amid intervention concerns and interest rate differentials

By RoboForex Analytical Department

The Japanese yen is experiencing a notable decline against the US dollar, with the USD/JPY pair currently hovering around 151.88 on Tuesday. Despite the US dollar’s instability, driven primarily by fluctuations in Treasury bond yields, the yen faces significant downward pressure.

Market participants remain cautious, particularly as the USD/JPY pair approaches levels that had previously triggered currency interventions by Japanese authorities. Despite aggressive verbal measures from Japan aimed at bolstering the yen, these efforts have shown limited success. Finance Minister Shunichi Suzuki has reiterated Japan’s commitment to addressing the yen’s excessive depreciation, echoing his earlier statements about readiness to intervene against further declines in its value.

However, the prospect of intervention, although a genuine threat, has thus far prevented the yen from breaching the 152.00 mark.

This substantial interest rate differential between the US Federal Reserve and the Bank of Japan (BoJ) is a critical factor contributing to the yen’s weakness. While the BoJ has only recently moved away from its negative interest rate policy, setting its lending rate back to zero, the Federal Reserve maintains a fund rate of 5.5% per annum, with no cuts implemented thus far.

Technical analysis of USD/JPY

On the H4 chart, the USD/JPY pair has completed a growth wave to 151.75 and corrected to the 150.80 level. Another growth wave to 151.75 has been observed today, with the market forming a consolidation range around this level. An upward breakout from this range could lead to a rise to 152.07. After reaching this level, a correction to 151.75 (testing from above) may occur, followed by an increase to 152.70. This scenario is supported by the MACD oscillator, with its signal line above zero and poised to reach new highs.

On the H1 chart, support at 151.75 has bolstered the development of a growth structure to 152.07. After achieving this target, a correction to 151.75 may be seen, potentially leading to further growth towards 152.70, the main target of the growth wave. The Stochastic oscillator confirms this analysis with its signal line above 50 and preparing to ascend to 80.

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Financial News Forex and Currency News

06 Apr

Speculators drop Swiss Franc bets for 9th week to most bearish since 2019

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 April 2nd 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 British Pound & Australian Dollar

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

Leading the gains for the currency markets was the British Pound Sterling (8,244 contracts) with the Australian Dollar (2,767 contracts), the Mexican Peso (1,662 contracts) and Bitcoin (1,235 contracts) also seeing positive a week.

The currencies seeing declines in speculator bets on the week were the EuroFX (-14,400 contracts), the Japanese Yen (-14,124 contracts), the Brazilian Real (-11,948 contracts), the New Zealand Dollar (-1,504 contracts), the US Dollar Index (-1,267 contracts), the Canadian Dollar (-933 contracts) and with the Swiss Franc (-402 contracts) also having lower bets on the week.

Speculators drop Swiss Franc bets for 9th week to most bearish since 2019

Highlighting the COT currency’s data this week is the decline in the speculator’s positioning for the Swiss franc. Large speculative Swiss franc (CHF) currency positions fell this week by a modest -402 net contracts but have now dropped for a ninth consecutive week. The speculator bets have also fallen for the tenth time out of the past eleven weeks as well – for a total 11-week decrease of -18,632 contracts.

This rapid decline in sentiment has taken the CHF speculative position to the most bearish level in the past two hundred and fifty-one weeks, dating all the way back to June 11th of 2019 when the net position totaled -24,788 contracts.

Helping to dent the Swiss franc’s appeal was a recent surprise interest rate cut by the the Swiss National Bank (SNB) in late March. This rate reduction took the interest rate down by 25 basis points to 1.5 percent and marked the SNB as the first major central bank to start a rate cutting cycle after global inflation pushed most central banks to raise rates in the past two years. As a major export country, the interest rate decrease and a falling franc is desirable for Switzerland businesses which will help exports become more competitive.

The CHF exchange rate versus the US Dollar has been on the decline after a strong uptrend from the 4th quarter of 2022 to late-2023 that saw the franc reach the highest exchange rate since 2015 at 1.2099 (CHF futures or CHFUSD). Since that high-point in December, the franc has been on the downtrend and closed out this week at the 1.1172 exchange rate to the Dollar and about 8 percent off that December high.

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 (100 percent) and the British Pound (82 percent) lead the currency markets this week. Bitcoin (69 percent) comes in as the next highest in the weekly strength scores.

On the downside, the Swiss Franc (0 percent), the Japanese Yen (0 percent), the US Dollar Index (1 percent), the Australian Dollar (4 percent) and the Canadian Dollar (16 percent) come in at the lowest strength levels currently and are all in Extreme-Bearish territory (below 20 percent).

Strength Statistics:
US Dollar Index (0.9 percent) vs US Dollar Index previous week (3.5 percent)
EuroFX (27.5 percent) vs EuroFX previous week (33.6 percent)
British Pound Sterling (82.1 percent) vs British Pound Sterling previous week (76.6 percent)
Japanese Yen (0.0 percent) vs Japanese Yen previous week (11.5 percent)
Swiss Franc (0.0 percent) vs Swiss Franc previous week (1.1 percent)
Canadian Dollar (16.1 percent) vs Canadian Dollar previous week (16.9 percent)
Australian Dollar (4.4 percent) vs Australian Dollar previous week (1.9 percent)
New Zealand Dollar (39.0 percent) vs New Zealand Dollar previous week (43.3 percent)
Mexican Peso (100.0 percent) vs Mexican Peso previous week (99.2 percent)
Brazilian Real (30.3 percent) vs Brazilian Real previous week (45.8 percent)
Bitcoin (68.8 percent) vs Bitcoin previous week (50.2 percent)

Bitcoin & Mexican Peso top the 6-Week Strength Trends

COT Strength Score Trends (or move index, calculates the 6-week changes in strength scores) showed that the Bitcoin (34 percent) and the Mexican Peso (19 percent) lead the past six weeks trends and are the only positive movers for the currencies.

The Canadian Dollar (-42 percent) leads the downside trend scores currently with the New Zealand Dollar (-40 percent), Swiss Franc (-35 percent) and the Brazilian Real (-26 percent) following next with lower trend scores.

Strength Trend Statistics:
US Dollar Index (-7.3 percent) vs US Dollar Index previous week (-5.6 percent)
EuroFX (-21.8 percent) vs EuroFX previous week (-9.2 percent)
British Pound Sterling (-1.9 percent) vs British Pound Sterling previous week (-10.1 percent)
Japanese Yen (-18.2 percent) vs Japanese Yen previous week (-14.3 percent)
Swiss Franc (-34.7 percent) vs Swiss Franc previous week (-44.4 percent)
Canadian Dollar (-42.3 percent) vs Canadian Dollar previous week (-37.6 percent)
Australian Dollar (-18.7 percent) vs Australian Dollar previous week (-23.8 percent)
New Zealand Dollar (-40.2 percent) vs New Zealand Dollar previous week (-26.8 percent)
Mexican Peso (19.1 percent) vs Mexican Peso previous week (16.0 percent)
Brazilian Real (-25.7 percent) vs Brazilian Real previous week (-13.8 percent)
Bitcoin (34.0 percent) vs Bitcoin previous week (12.7 percent)

Individual COT Forex Markets:

US Dollar Index Futures:

The US Dollar Index large speculator standing this week resulted in a net position of -1,896 contracts in the data reported through Tuesday. This was a weekly lowering of -1,267 contracts from the previous week which had a total of -629 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 0.9 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 36.8 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.

US DOLLAR INDEX Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	62.1	22.2	12.4
– Percent of Open Interest Shorts:	67.1	23.0	6.7
– Net Position:	-1,896	-305	2,201
– Gross Longs:	23,681	8,446	4,744
– Gross Shorts:	25,577	8,751	2,543
– Long to Short Ratio:	0.9 to 1	1.0 to 1	1.9 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	0.9	100.0	36.8
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-7.3	5.9	7.2

Euro Currency Futures:

The Euro Currency large speculator standing this week resulted in a net position of 16,794 contracts in the data reported through Tuesday. This was a weekly reduction of -14,400 contracts from the previous week which had a total of 31,194 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 27.5 percent. The commercials are Bullish with a score of 76.7 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 5.5 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.

EURO Currency Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	27.6	60.4	10.8
– Percent of Open Interest Shorts:	25.1	65.3	8.3
– Net Position:	16,794	-33,432	16,638
– Gross Longs:	188,258	412,480	73,567
– Gross Shorts:	171,464	445,912	56,929
– Long to Short Ratio:	1.1 to 1	0.9 to 1	1.3 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	27.5	76.7	5.5
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-21.8	21.0	-7.7

British Pound Sterling Futures:

The British Pound Sterling large speculator standing this week resulted in a net position of 43,414 contracts in the data reported through Tuesday. This was a weekly rise of 8,244 contracts from the previous week which had a total of 35,170 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 82.1 percent. The commercials are Bearish with a score of 23.6 percent and the small traders (not shown in chart) are Bullish with a score of 50.1 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.

BRITISH POUND Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	44.9	41.1	11.5
– Percent of Open Interest Shorts:	25.1	59.1	13.3
– Net Position:	43,414	-39,400	-4,014
– Gross Longs:	98,352	90,146	25,106
– Gross Shorts:	54,938	129,546	29,120
– Long to Short Ratio:	1.8 to 1	0.7 to 1	0.9 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	82.1	23.6	50.1
– Strength Index Reading (3 Year Range):	Bullish-Extreme	Bearish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-1.9	5.4	-13.2

Japanese Yen Futures:

The Japanese Yen large speculator standing this week resulted in a net position of -143,230 contracts in the data reported through Tuesday. This was a weekly decrease of -14,124 contracts from the previous week which had a total of -129,106 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 Bullish-Extreme with a score of 94.3 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:	17.4	64.8	15.9
– Percent of Open Interest Shorts:	62.6	20.7	14.8
– Net Position:	-143,230	139,494	3,736
– Gross Longs:	55,190	205,195	50,476
– Gross Shorts:	198,420	65,701	46,740
– Long to Short Ratio:	0.3 to 1	3.1 to 1	1.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	0.0	100.0	94.3
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-18.2	11.1	27.7

Swiss Franc Futures:

The Swiss Franc large speculator standing this week resulted in a net position of -22,370 contracts in the data reported through Tuesday. This was a weekly decline of -402 contracts from the previous week which had a total of -21,968 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 0.0 percent. The commercials are Bullish-Extreme with a score of 100.0 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 3.1 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.

SWISS FRANC Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	24.4	64.5	11.1
– Percent of Open Interest Shorts:	50.0	20.0	29.8
– Net Position:	-22,370	38,683	-16,313
– Gross Longs:	21,220	56,144	9,682
– Gross Shorts:	43,590	17,461	25,995
– Long to Short Ratio:	0.5 to 1	3.2 to 1	0.4 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	0.0	100.0	3.1
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-34.7	40.8	-30.7

Canadian Dollar Futures:

The Canadian Dollar large speculator standing this week resulted in a net position of -51,223 contracts in the data reported through Tuesday. This was a weekly decrease of -933 contracts from the previous week which had a total of -50,290 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 16.1 percent. The commercials are Bullish-Extreme with a score of 84.3 percent and the small traders (not shown in chart) are Bearish with a score of 20.0 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: New Sell – Short Position.

CANADIAN DOLLAR Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	22.4	61.0	14.1
– Percent of Open Interest Shorts:	48.4	34.4	14.7
– Net Position:	-51,223	52,481	-1,258
– Gross Longs:	44,220	120,307	27,748
– Gross Shorts:	95,443	67,826	29,006
– 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):	16.1	84.3	20.0
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-42.3	31.9	-1.7

Australian Dollar Futures:

The Australian Dollar large speculator standing this week resulted in a net position of -102,685 contracts in the data reported through Tuesday. This was a weekly increase of 2,767 contracts from the previous week which had a total of -105,452 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 4.4 percent. The commercials are Bullish-Extreme with a score of 97.5 percent and the small traders (not shown in chart) are Bearish with a score of 25.5 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.

AUSTRALIAN DOLLAR Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	15.4	73.3	9.1
– Percent of Open Interest Shorts:	61.0	22.5	14.1
– Net Position:	-102,685	114,086	-11,401
– Gross Longs:	34,557	164,790	20,421
– Gross Shorts:	137,242	50,704	31,822
– Long to Short Ratio:	0.3 to 1	3.3 to 1	0.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	4.4	97.5	25.5
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-18.7	15.5	-1.7

New Zealand Dollar Futures:

The New Zealand Dollar large speculator standing this week resulted in a net position of -7,528 contracts in the data reported through Tuesday. This was a weekly reduction of -1,504 contracts from the previous week which had a total of -6,024 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 39.0 percent. The commercials are Bullish with a score of 66.8 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 13.3 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.

NEW ZEALAND DOLLAR Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	32.0	62.2	5.5
– Percent of Open Interest Shorts:	44.1	44.9	10.6
– Net Position:	-7,528	10,695	-3,167
– Gross Longs:	19,725	38,421	3,383
– Gross Shorts:	27,253	27,726	6,550
– Long to Short Ratio:	0.7 to 1	1.4 to 1	0.5 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	39.0	66.8	13.3
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-40.2	45.2	-56.0

Mexican Peso Futures:

The Mexican Peso large speculator standing this week resulted in a net position of 133,730 contracts in the data reported through Tuesday. This was a weekly rise of 1,662 contracts from the previous week which had a total of 132,068 net contracts.

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:	60.9	36.1	2.7
– Percent of Open Interest Shorts:	18.4	80.4	0.9
– Net Position:	133,730	-139,435	5,705
– Gross Longs:	191,685	113,502	8,643
– Gross Shorts:	57,955	252,937	2,938
– Long to Short Ratio:	3.3 to 1	0.4 to 1	2.9 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	100.0	0.0	47.6
– Strength Index Reading (3 Year Range):	Bullish-Extreme	Bearish-Extreme	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	19.1	-18.6	2.4

Brazilian Real Futures:

The Brazilian Real large speculator standing this week resulted in a net position of -3,261 contracts in the data reported through Tuesday. This was a weekly lowering of -11,948 contracts from the previous week which had a total of 8,687 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 30.3 percent. The commercials are Bullish with a score of 68.5 percent and the small traders (not shown in chart) are Bullish with a score of 52.2 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:	58.2	34.8	6.6
– Percent of Open Interest Shorts:	64.5	32.2	2.9
– Net Position:	-3,261	1,359	1,902
– Gross Longs:	30,318	18,139	3,413
– Gross Shorts:	33,579	16,780	1,511
– Long to Short Ratio:	0.9 to 1	1.1 to 1	2.3 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	30.3	68.5	52.2
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-25.7	25.2	-0.3

Bitcoin Futures:

The Bitcoin large speculator standing this week resulted in a net position of 160 contracts in the data reported through Tuesday. This was a weekly advance of 1,235 contracts from the previous week which had a total of -1,075 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 68.8 percent. The commercials are Bearish with a score of 39.1 percent and the small traders (not shown in chart) are Bearish with a score of 32.2 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.

BITCOIN Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	81.7	5.1	5.4
– Percent of Open Interest Shorts:	81.2	8.5	2.6
– Net Position:	160	-1,008	848
– Gross Longs:	24,311	1,513	1,619
– Gross Shorts:	24,151	2,521	771
– Long to Short Ratio:	1.0 to 1	0.6 to 1	2.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	68.8	39.1	32.2
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	34.0	-56.2	-1.1

Article By InvestMacro – Receive our weekly COT Newsletter

COT Updates Forex and Currency News Opinions

06 Apr

Speculator Extremes: Silver, Gasoline & Peso lead Bullish & Bearish Positions

By InvestMacro

The latest update for the weekly Commitment of Traders (COT) report was released by the Commodity Futures Trading Commission (CFTC) on Friday for data ending on April 2nd.

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

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

Here Are This Week’s Most Bullish Speculator Positions:

Silver

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

The six-week trend for the percent strength score totaled 46.7 this week. The overall net speculator position was a total of 53,147 net contracts this week with a gain of 2,311 contract in the weekly speculator bets.

Speculators or Non-Commercials Notes:

Speculators, classified as non-commercial traders by the CFTC, are made up of large commodity funds, hedge funds and other significant for-profit participants. The Specs are generally regarded as trend-followers in their behavior towards price action – net speculator bets and prices tend to go in the same directions. These traders often look to buy when prices are rising and sell when prices are falling. To illustrate this point, many times speculator contracts can be found at their most extremes (bullish or bearish) when prices are also close to their highest or lowest levels.

These extreme levels can be dangerous for the large speculators as the trade is most crowded, there is less trading ammunition still sitting on the sidelines to push the trend further and prices have moved a significant distance. When the trend becomes exhausted, some speculators take profits while others look to also exit positions when prices fail to continue in the same direction. This process usually plays out over many months to years and can ultimately create a reverse effect where prices start to fall and speculators start a process of selling when prices are falling.

Gasoline

The Gasoline speculator position comes next in the extreme standings this week. The Gasoline speculator level is now also at a 100.0 percent score of its 3-year range.

The six-week trend for the percent strength score was 36.5 this week. The speculator position registered 83,723 net contracts this week with a weekly rise of 7,994 contracts in speculator bets.

Mexican Peso

The Mexican Peso speculator position comes in next this week in the extreme standings. The Mexican Peso speculator level also resides at a 100.0 percent score of its 3-year range.

The six-week trend for the speculator strength score came in at 19.1 this week. The overall speculator position was 133,730 net contracts this week with a small rise of 1,662 contracts in the weekly speculator bets.

Coffee

The Coffee speculator position comes up number four in the extreme standings this week. The Coffee speculator level is at a 96.6 percent score of its 3-year range.

The six-week trend for the speculator strength score totaled a change of 11.9 this week. The overall speculator position was 67,482 net contracts this week with a boost of 11,447 contracts in the speculator bets.

Steel

The Steel speculator position rounds out the top five in this week’s bullish extreme standings. The Steel speculator level sits at a 93.6 percent score of its 3-year range. The six-week trend for the speculator strength score was 7.6 this week.

The speculator position was -714 net contracts this week with an increase by 1,074 contracts in the weekly speculator bets.

This Week’s Most Bearish Speculator Positions:

Japanese Yen

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

The six-week trend for the speculator strength score was -18.2 this week. The overall speculator position was -143,230 net contracts this week with a decline of -14,124 contracts in the speculator bets.

Swiss Franc

The Swiss Franc speculator position comes in next for the most bearish extreme standing on the week. The Swiss Franc speculator level is at a 0.0 percent score of its 3-year range.

The six-week trend for the speculator strength score was -34.7 this week. The speculator position was -22,370 net contracts this week with a dip of -402 contracts in the weekly speculator bets.

US Dollar Index

The US Dollar Index speculator position comes in as third most bearish extreme standing of the week. The US Dollar Index speculator level resides at a 0.9 percent score of its 3-year range.

The six-week trend for the speculator strength score was -7.3 this week. The overall speculator position was -1,896 net contracts this week with a drop of -1,267 contracts in the speculator bets.

Australian Dollar

The Australian Dollar speculator position comes in as this week’s fourth most bearish extreme standing. The Australian Dollar speculator level is at a 4.4 percent score of its 3-year range.

The six-week trend for the speculator strength score was -18.7 this week. The speculator position was -102,685 net contracts this week with a gain of 2,767 contracts in the weekly speculator bets.

1-Month Secured Overnight Financing Rate

Finally, the 1-Month Secured Overnight Financing Rate speculator position comes in as the fifth most bearish extreme standing for this week. The 1-Month Secured Overnight Financing Rate speculator level is at a 8.2 percent score of its 3-year range.

The six-week trend for the speculator strength score was -39.6 this week. The speculator position was -220,606 net contracts this week with a decrease by -48,562 contracts in the weekly speculator bets.

Article By InvestMacro – Receive our weekly COT Newsletter

COT Updates Forex and Currency News Opinions

05 Apr

Week Ahead: EURCAD ready to breakout?

By ForexTime

Big week for minor currency pair

BoC + ECB rate decisions in focus

EURCAD trapped within 300 pip range

Prices gaining bullish momentum on D1

Bloomberg model: 76% chance EURCAD – (1.45454 – 1.48439)

Key central bank decisions, speeches from policymakers, high-impact data, and earnings announcements by US banks may inject markets with fresh volatility next week:

Sunday, 7th April

CNH: China forex reserves

Monday, 8th April

GER40: Germany industrial production
JPY: Japan current account balance
CHF: SNB President Thomas Jordan speech
SEK: Riksbank Governor Erik Thedeen speech
USD: Minneapolis Fed President Neel Kashkari speech

Tuesday, 9th April

AU200: Australia consumer confidence
CN50: China aggregate financing, money supply, new yuan loans
TWN: Taiwan CPI
CHF: SNB Vice Chair Martin Schlegel speech
SEK: Riksbank Deputy Governor Martin Floden speech
ZAR: South Africa manufacturing production

Wednesday, 10th April

CAD: BoC rate decision
JP225: Japan PPI
NZD: RBNZ rate decision
TWN: Taiwan trade
NAS100: US March CPI, FOMC minutes, Chicago Fed President Austan Goolsbee speech

Thursday, 11th April

CN50: China CPI, PPI
EUR: ECB rate decision
US30: US initial jobless claims, PPI, New York Fed President John Williams, Boston Fed President Susan Collins speech
GBP: BOE policymaker Megan Greene speech
SEK: Riksbank Deputy Governor Per Jansson speech

Friday, 12th April

CAD: Canada existing home sales
CNH: China trade
GER40: Germany CPI
JP225: Japan industrial production
NZD: New Zealand food prices, PMI
UK100: UK industrial production, Manufacturing production, Trade balance, GDP (MoM)
USD: University of Michigan consumer sentiment, San Francisco Fed President Mary Daly speech
US500: Citigroup, JPMorgan and Wells Fargo earnings

The spotlight shines on the EURCAD which has been trapped within a 300-pip range since December 2023.

Given how the Bank of Canada (BoC) and European Central Bank (ECB) rate decisions have the potential to rock the minor currency, a major breakout may be on the horizon.

Here are 3 reasons why:

1) BoC rate decision

The Bank of Canada is expected to leave interest rates unchanged at 5% on Wednesday.

When considering the two consecutive downside surprises in inflation, expectations are rising over the central bank cutting interest rates in summer. Nevertheless, much attention will be directed towards the policy statement for fresh insight into the central bank’s future rate decisions.

Traders are currently pricing in a 72% probability of a 25-basis point BoC cut by June 2024 with a move fully priced in by July.

Should the BoC hint that a rate cut could be on the horizon, the CAD is likely to weaken – boosting the USDCAD as a result.

If the BoC signals that more time may be needed before rates are lowered, this could lend support to the CAD – dragging the USDCAD lower.

2) ECB rate decision

Markets widely expect the European Central Bank to leave interest rates unchanged on Thursday.

Back in March, the European Central Bank signalled that interest rates could be cut by June after lowering its forecast for inflation. So much focus will be on Lagarde’s press conference for additional clues on future policy moves, especially after inflation fell to 2.4% in March – its lowest rate in more than two years.

Traders are currently pricing in a 92% probability of a 25-basis point ECB cut by June with a move fully priced in by July.

A dovish sounding ECB that confirms that rates will be cut in June may hit the euro, sending the EURCAD lower.

If the ECB sounds more hawkish than expected, the euro may jump – pushing the EURCAD higher.

3) Technical forces

EURCAD seems to be gaining bullish momentum on the daily charts with prices trading above the 50, 100 and 200-day SMA.

A solid breakout above 1.4700 may trigger a move towards 1.4750 which has proved a tough nut to crack. Should bulls secure a solid daily close above this level, it could open the doors towards 1.4850.

Should prices drop below the 100-day SMA at 1.4665, this could trigger a selloff towards the 50-day SMA and 200-day SMA at 1.4620. Below this point, will be the low at 1.4545.

The Bloomberg FX model now forecasts a 76% chance that EURCAD will trade within the 1.45454 – 1.48439 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

Forex and Currency News Opinions

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