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EUR/USD Shows Resilience Amid Risk Appetite

By RoboForex Analytical Department

The EUR/USD pair is trading close to 1.0821, demonstrating a strong stance in the current market environment. Investors are leaning towards riskier assets, buoyed by the anticipation of several key macroeconomic releases this week.

A critical focal point for the market will be the upcoming US inflation data, particularly the core Personal Consumption Expenditures (PCE) price index, a preferred measure of inflation by the Federal Reserve. The report, expected to be released on Thursday, is forecasted to show a 0.4% month-on-month increase. This data is crucial as it influences the Fed’s monetary policy decisions.

The prevailing market sentiment suggests that the Federal Reserve may not be poised to embark on a monetary easing cycle just yet, opting instead to maintain the current interest rate levels for a longer duration.

Technical Analysis for EUR/USD

On the H4 chart, EUR/USD has shown a downtrend, reaching a low of 1.0802. It’s anticipated that a corrective movement could occur next. After this correction, the price is expected to decline to 1.0785, where it might form a consolidation range. A break below this range could lead to a further decrease towards the local target of 1.0720. This bearish scenario is supported by the MACD indicator, with its signal line positioned below zero and the histogram indicating a sharp decline, suggesting a potential further decline in the price to new lows.

The H1 chart presents a consolidation phase around 1.0824, followed by a potential drop to 1.0784. After reaching this level, the price may rebound to 1.0850 before descending again to 1.0720. This analysis is corroborated by the Stochastic oscillator, with its signal line currently near 80 and anticipated to drop to 20, indicating the likelihood of further price movements within this trend.

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

26 Feb

Trade Of The Week: EURNZD to keep above key support?

By ForexTime

EURNZD rebounds from key support

RBNZ decision + EU data in focus

Trend bearish on D1 but bulls present

Key level of interest at 50-day SMA

Bloomberg model: 75% chance range 1.7384 – 1.7768

After practically erasing its 2024 gains last week, the EURNZD kicked off Monday with renewed bullish force!

Bulls returned to the scene, pushing prices back above 1.7550 ahead of a potentially volatile week for the minor currency pair.

Note: A minor currency pair does not include the USD but includes at least one of the world’s majors.

Looking at the past few weeks, the EURNZD has been on a rollercoaster ride thanks to technical and fundamental forces. Although prices have been edging lower on the weekly charts, key support can be found at 1.7420.

To put things into context, the last time the EURNZD secured a weekly close below this level was back in early January 2023.

On the monthly charts, there is a similar picture with prices waiting for a fresh fundamental spark to trigger the next big move.

With all the above said, here are 3 reasons why this could be a wild week for the EURNZD:

RBNZ rate decision

The Reserve Bank of New Zealand is widely expected to keep its key rates unchanged at 5.50% at its February 28th meeting.

Economic growth unexpectedly contracted in Q3 while there have been consistent signs of cooling price pressures. However, traders are still pricing in a 54% probability of one more rate hike by May 2024 with the first rate cut expected by November. Much attention will be directed towards the monetary policy statement which may provide fresh insight into the central bank’s thinking for 2024.

Should the RBNZ strike a hawkish note and signal one more hike could still be on the cards, this may strengthen the New Zealand Dollar.

Any hint of doves or signs that the next move could be a cut has the potential to weaken the NZD, pushing the EURNZD higher as a result.

Key EU data

It is a week packed with top-tier data from Europe, but the standouts are the Germany and Eurozone February inflation reports.

These incoming inflation reports could influence expectations about when the European Central Bank (ECB) will start cutting interest rates in 2024. Traders are currently pricing in a 30% probability of a rate cut by April with a move by the ECB fully priced in by June 2024.

Given how the inflation data and other data from Europe may influence these bets, it could be reflected in the EURNZD.

If overall data from Europe, including sticky inflation numbers, support the argument around the ECB keeping rates higher for longer – this could boost the euro.

Signs of cooling price pressures and soft data may fuel speculation around lower rates in Europe, dragging the euro lower.

Technical forces

The EURNZD remains in a noisy range on the daily charts with support at 1.7420 and resistance around 1.7700. Although the trend since mid-January points south, bulls are lingering in the vicinity.

A strong breakout and daily close above the 50-day SMA at 1.7600 may encourage an incline towards 1.7700 and the 100-day SMA at 1.7760.

Should the 50-day SMA prove to be reliable resistance, this may trigger a decline back towards 1.7420 and 1.7384.

According to Bloomberg’s FX forecast model, there’s a 75% chance that EURNZD will trade within the 1.7384 – 1.7768 over the next week.

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

24 Feb

Speculators push New Zealand Dollar bets to 51-week high

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 February 20th 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, Canadian Dollar & New Zealand Dollar

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

Leading the gains for the currency markets was the EuroFX (15,178 contracts) with the Canadian Dollar (4,619 contracts) and the New Zealand Dollar (3,219 contracts) also having positive weeks.

The currencies seeing declines in speculator bets on the week were the Japanese Yen (-9,242 contracts), the Mexican Peso (-4,449 contracts), the British Pound (-4,160 contracts), the Swiss Franc (-3,909 contracts), the Australian Dollar (-2,899 contracts), the Brazilian Real (-2,826 contracts), the US Dollar Index (-456 contracts) and Bitcoin (-177 contracts) also seeing lower bets on the week.

Speculators push New Zealand Dollar bets to highest in just about a year

Highlighting the COT currency’s data this week is the recent increase in the speculator’s positioning for the New Zealand Dollar. The large speculative New Zealand Dollar (NZD) currency positions gained this week by over +3,000 net contracts and have now climbed for six consecutive weeks. The NZD bets have also risen in nine out of the past twelve weeks, going from a total net position of -16,450 contracts on December 5th to a total of +6,626 contracts this week.

This improvement has taken the NZD to it’s most bullish level in the past fifty-one weeks, dating back to February 28th of 2023.

Helping the NZD speculator sentiment is the possibility that the Reserve Bank of New Zealand (RBNZ) may increase the bank’s interest rate at the next policy meeting. The RBNZ is on schedule to hold its next meeting on February 27th with the official cash rate residing at 5.5 percent. Investment services such as ANZ Bank and TD Bank are anticipating the RBNZ to increase the cash rate by 25 basis points because of high inflation. The New Zealand consumer price index (most recently at 4.7 percent for December) continues to be higher than the bank’s target range of between 1-3 percent annually. However, weak economic growth that unexpectedly contracted by -0.60 percent (annual) in the third quarter of 2023 may help to persuade the RBNZ to hold the rate steady.

The NZD exchange rate versus the US Dollar has been on the rise recently with a weekly close just below 0.6200 level. The NZDUSD hit a multi-year low of 0.5558 in October of 2022 and more recently hit a low of 0.5809 in October of 2023. Since then, the currency pair has been able to rise and break through the 0.6000 major resistance and bounce off the 200-day moving average. The currency has ridden an eight-day win-streak to rise into this week’s close near 0.6200.

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 (97 percent) and the British Pound (88 percent) lead the currency markets this week. The New Zealand Dollar (73 percent), Canadian Dollar (58 percent) and the Brazilian Real (56 percent) come in as the next highest in the weekly strength scores.

On the downside, the Japanese Yen (6 percent) and the Australian Dollar (14 percent) come in at the lowest strength levels currently and are in Extreme-Bearish territory (below 20 percent). The next lowest strength scores are the US Dollar Index (21 percent) and the Swiss Franc (31 percent).

Strength Statistics:
US Dollar Index (21.1 percent) vs US Dollar Index previous week (22.0 percent)
EuroFX (49.3 percent) vs EuroFX previous week (42.8 percent)
British Pound Sterling (87.9 percent) vs British Pound Sterling previous week (90.8 percent)
Japanese Yen (6.3 percent) vs Japanese Yen previous week (12.5 percent)
Swiss Franc (30.6 percent) vs Swiss Franc previous week (41.8 percent)
Canadian Dollar (58.4 percent) vs Canadian Dollar previous week (54.5 percent)
Australian Dollar (13.8 percent) vs Australian Dollar previous week (16.5 percent)
New Zealand Dollar (72.7 percent) vs New Zealand Dollar previous week (64.3 percent)
Mexican Peso (97.3 percent) vs Mexican Peso previous week (100.0 percent)
Brazilian Real (55.9 percent) vs Brazilian Real previous week (59.6 percent)
Bitcoin (34.8 percent) vs Bitcoin previous week (37.5 percent)

New Zealand Dollar & British Pound top the 6-Week Strength Trends

COT Strength Score Trends (or move index, calculates the 6-week changes in strength scores) showed that the New Zealand Dollar (22 percent) and the British Pound (18 percent) lead the past six weeks trends for the currencies. The Canadian Dollar (5 percent) and the Mexican Peso (5 percent) are the next highest positive movers in the latest trends data.

The Australian Dollar (-45 percent) leads the downside trend scores currently with the Japanese Yen (-43 percent), the EuroFX (-22 percent) and the Swiss Franc (-16 percent) following next with lower trend scores.

Strength Trend Statistics:
US Dollar Index (-2.5 percent) vs US Dollar Index previous week (-0.8 percent)
EuroFX (-21.7 percent) vs EuroFX previous week (-28.4 percent)
British Pound Sterling (17.8 percent) vs British Pound Sterling previous week (24.5 percent)
Japanese Yen (-43.4 percent) vs Japanese Yen previous week (-36.3 percent)
Swiss Franc (-15.8 percent) vs Swiss Franc previous week (-2.3 percent)
Canadian Dollar (5.5 percent) vs Canadian Dollar previous week (13.1 percent)
Australian Dollar (-45.4 percent) vs Australian Dollar previous week (-33.0 percent)
New Zealand Dollar (21.9 percent) vs New Zealand Dollar previous week (10.3 percent)
Mexican Peso (4.6 percent) vs Mexican Peso previous week (6.9 percent)
Brazilian Real (-11.1 percent) vs Brazilian Real previous week (-19.4 percent)
Bitcoin (-7.2 percent) vs Bitcoin previous week (4.5 percent)

Individual COT Forex Markets:

US Dollar Index Futures:

The US Dollar Index large speculator standing this week totaled a net position of 1,546 contracts in the data reported through Tuesday. This was a weekly decrease of -456 contracts from the previous week which had a total of 2,002 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 21.1 percent. The commercials are Bullish with a score of 78.6 percent and the small traders (not shown in chart) are Bearish with a score of 29.6 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.

US DOLLAR INDEX Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	62.5	18.8	13.1
– Percent of Open Interest Shorts:	57.4	29.2	7.8
– Net Position:	1,546	-3,126	1,580
– Gross Longs:	18,732	5,625	3,916
– Gross Shorts:	17,186	8,751	2,336
– Long to Short Ratio:	1.1 to 1	0.6 to 1	1.7 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	21.1	78.6	29.6
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-2.5	-1.6	26.5

Euro Currency Futures:

The Euro Currency large speculator standing this week totaled a net position of 68,016 contracts in the data reported through Tuesday. This was a weekly rise of 15,178 contracts from the previous week which had a total of 52,838 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 49.3 percent. The commercials are Bullish with a score of 55.7 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 13.2 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.

EURO Currency Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	29.5	57.6	10.8
– Percent of Open Interest Shorts:	20.1	70.0	7.8
– Net Position:	68,016	-89,451	21,435
– Gross Longs:	213,194	416,183	77,957
– Gross Shorts:	145,178	505,634	56,522
– Long to Short Ratio:	1.5 to 1	0.8 to 1	1.4 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	49.3	55.7	13.2
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-21.7	25.2	-26.4

British Pound Sterling Futures:

The British Pound Sterling large speculator standing this week totaled a net position of 46,312 contracts in the data reported through Tuesday. This was a weekly reduction of -4,160 contracts from the previous week which had a total of 50,472 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 87.9 percent. The commercials are Bearish-Extreme with a score of 18.2 percent and the small traders (not shown in chart) are Bullish with a score of 63.3 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.

BRITISH POUND Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	44.0	36.6	15.1
– Percent of Open Interest Shorts:	20.7	61.2	13.7
– Net Position:	46,312	-49,006	2,694
– Gross Longs:	87,602	72,901	30,014
– Gross Shorts:	41,290	121,907	27,320
– Long to Short Ratio:	2.1 to 1	0.6 to 1	1.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	87.9	18.2	63.3
– Strength Index Reading (3 Year Range):	Bullish-Extreme	Bearish-Extreme	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	17.8	-14.6	1.1

Japanese Yen Futures:

The Japanese Yen large speculator standing this week totaled a net position of -120,778 contracts in the data reported through Tuesday. This was a weekly decrease of -9,242 contracts from the previous week which had a total of -111,536 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 6.3 percent. The commercials are Bullish-Extreme with a score of 94.9 percent and the small traders (not shown in chart) are Bullish with a score of 66.7 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.

JAPANESE YEN Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	17.6	65.2	13.6
– Percent of Open Interest Shorts:	57.2	24.0	15.3
– Net Position:	-120,778	125,854	-5,076
– Gross Longs:	53,862	199,061	41,618
– Gross Shorts:	174,640	73,207	46,694
– Long to Short Ratio:	0.3 to 1	2.7 to 1	0.9 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	6.3	94.9	66.7
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-43.4	49.6	-21.5

Swiss Franc Futures:

The Swiss Franc large speculator standing this week totaled a net position of -9,923 contracts in the data reported through Tuesday. This was a weekly reduction of -3,909 contracts from the previous week which had a total of -6,014 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 30.6 percent. The commercials are Bullish with a score of 66.8 percent and the small traders (not shown in chart) are Bearish with a score of 33.8 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.

SWISS FRANC Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	21.7	62.4	15.7
– Percent of Open Interest Shorts:	38.2	29.9	31.6
– Net Position:	-9,923	19,476	-9,553
– Gross Longs:	13,036	37,455	9,413
– Gross Shorts:	22,959	17,979	18,966
– Long to Short Ratio:	0.6 to 1	2.1 to 1	0.5 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	30.6	66.8	33.8
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-15.8	40.6	-51.9

Canadian Dollar Futures:

The Canadian Dollar large speculator standing this week totaled a net position of -863 contracts in the data reported through Tuesday. This was a weekly boost of 4,619 contracts from the previous week which had a total of -5,482 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 58.4 percent. The commercials are Bullish with a score of 52.3 percent and the small traders (not shown in chart) are Bearish with a score of 21.7 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.

CANADIAN DOLLAR Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	23.5	55.9	18.5
– Percent of Open Interest Shorts:	24.1	55.1	18.8
– Net Position:	-863	1,345	-482
– Gross Longs:	37,108	88,205	29,192
– Gross Shorts:	37,971	86,860	29,674
– Long to Short Ratio:	1.0 to 1	1.0 to 1	1.0 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	58.4	52.3	21.7
– Strength Index Reading (3 Year Range):	Bullish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	5.5	2.0	-21.4

Australian Dollar Futures:

The Australian Dollar large speculator standing this week totaled a net position of -81,875 contracts in the data reported through Tuesday. This was a weekly fall of -2,899 contracts from the previous week which had a total of -78,976 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 13.8 percent. The commercials are Bullish-Extreme with a score of 86.9 percent and the small traders (not shown in chart) are Bearish with a score of 27.2 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.

AUSTRALIAN DOLLAR Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	23.9	64.0	9.4
– Percent of Open Interest Shorts:	63.7	19.0	14.6
– Net Position:	-81,875	92,611	-10,736
– Gross Longs:	49,100	131,694	19,375
– Gross Shorts:	130,975	39,083	30,111
– Long to Short Ratio:	0.4 to 1	3.4 to 1	0.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	13.8	86.9	27.2
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-45.4	53.9	-55.3

New Zealand Dollar Futures:

The New Zealand Dollar large speculator standing this week totaled a net position of 6,626 contracts in the data reported through Tuesday. This was a weekly rise of 3,219 contracts from the previous week which had a total of 3,407 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 72.7 percent. The commercials are Bearish with a score of 26.9 percent and the small traders (not shown in chart) are Bullish with a score of 69.3 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.

NEW ZEALAND DOLLAR Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	48.2	35.0	11.2
– Percent of Open Interest Shorts:	32.1	54.1	8.3
– Net Position:	6,626	-7,799	1,173
– Gross Longs:	19,758	14,341	4,580
– Gross Shorts:	13,132	22,140	3,407
– Long to Short Ratio:	1.5 to 1	0.6 to 1	1.3 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	72.7	26.9	69.3
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	21.9	-17.3	-10.3

Mexican Peso Futures:

The Mexican Peso large speculator standing this week totaled a net position of 95,995 contracts in the data reported through Tuesday. This was a weekly decline of -4,449 contracts from the previous week which had a total of 100,444 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 97.3 percent. The commercials are Bearish-Extreme with a score of 2.2 percent and the small traders (not shown in chart) are Bearish with a score of 45.2 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.

MEXICAN PESO Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	55.6	40.1	3.2
– Percent of Open Interest Shorts:	17.9	79.9	1.1
– Net Position:	95,995	-101,330	5,335
– Gross Longs:	141,528	102,096	8,061
– Gross Shorts:	45,533	203,426	2,726
– Long to Short Ratio:	3.1 to 1	0.5 to 1	3.0 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	97.3	2.2	45.2
– Strength Index Reading (3 Year Range):	Bullish-Extreme	Bearish-Extreme	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	4.6	-4.3	-1.5

Brazilian Real Futures:

The Brazilian Real large speculator standing this week totaled a net position of 16,522 contracts in the data reported through Tuesday. This was a weekly fall of -2,826 contracts from the previous week which had a total of 19,348 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 55.9 percent. The commercials are Bearish with a score of 43.0 percent and the small traders (not shown in chart) are Bullish with a score of 52.4 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.

BRAZIL REAL Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	55.7	38.8	5.2
– Percent of Open Interest Shorts:	27.3	70.5	1.9
– Net Position:	16,522	-18,453	1,931
– Gross Longs:	32,457	22,619	3,031
– Gross Shorts:	15,935	41,072	1,100
– Long to Short Ratio:	2.0 to 1	0.6 to 1	2.8 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	55.9	43.0	52.4
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-11.1	11.7	-6.6

Bitcoin Futures:

The Bitcoin large speculator standing this week totaled a net position of -2,098 contracts in the data reported through Tuesday. This was a weekly decline of -177 contracts from the previous week which had a total of -1,921 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 34.8 percent. The commercials are Bullish-Extreme with a score of 95.3 percent and the small traders (not shown in chart) are Bearish with a score of 33.3 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:	76.9	7.3	6.8
– Percent of Open Interest Shorts:	85.1	2.6	3.2
– Net Position:	-2,098	1,202	896
– Gross Longs:	19,624	1,862	1,724
– Gross Shorts:	21,722	660	828
– Long to Short Ratio:	0.9 to 1	2.8 to 1	2.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	34.8	95.3	33.3
– Strength Index Reading (3 Year Range):	Bearish	Bullish-Extreme	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-7.2	10.8	1.3

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.

COT Updates Forex and Currency News Opinions

23 Feb

Week Ahead: USDJPY timebomb triggered above 150?

By ForexTime

JPY worst performing G10 YTD

Japan CPI & US PCE in focus

Yen back on intervention watch

USDJPY bullish but RSI overbought

Key level of interest at 150.90

Our focus lands on the Japanese Yen which has been the worst-performing G10 currency against the US Dollar year-to-date.

The final trading week of February promises to be eventful due to key economic data, speeches by numerous Fed officials, and threat of a partial US government shutdown:

Tuesday, 27th February

JPY: Japan CPI

Wednesday, 28th February

EUR: Eurozone economic confidence, consumer confidence
NZD: New Zealand rate decision
USD: Q4 GDP (2nd estimate), Atlanta Fed President Raphael Bostic, Boston Fed President Susan Collins, New York Fed President John Williams speech

Thursday, 29th February

AUD: Australia retail sales
CAD: Canada GDP
EUR: Germany CPI, unemployment
JPY: Japan industrial production, retail sales
USD: US January PCE report, Chicago Fed President Austan Goolsbee, Atlanta Fed President Raphael Bostic, Cleveland Fed President Loretta Mester speech

Friday, 1st March

CNH: China official PMI, Caixin manufacturing PMI
EUR: Eurozone CPI, unemployment, PMI, Germany Manufacturing PMI
GBP: UK S&P Global/CPIS Manufacturing PMI
USD: US ISM manufacturing, University of Michigan consumer sentiment, Fed speeches
Deadline for avoiding partial US government shutdown

Yen weakness has been a major theme this quarter thanks to a dovish BoJ, with the recession in Japan fuelling uncertainty about likely timings for a policy pivot.

Note: Yen down more than 6% versus the USD year-to-date.

The Yen’s recent depreciation below 150 per dollar has sparked warnings from Japanese officials, ultimately fuelling market fears of possible intervention.

With the USDJPY venturing closer to multi-year highs just below 152, a major move could be brewing.

With all the above said, here are 3 factors that could influence the USDJPY:

Japan inflation data

Japan’s national consumer price index (CPI) is forecast to slow to 1.9% year on year in January from the 2.6% in January. The core measure which excludes fresh food is expected to cool 1.9% year on year, down from 2.3% in December.

Should expectations match reality, this will be the first time the core CPI has dipped below the BoJ’s 2% target since March 2022.

Traders are currently pricing in only a 29% probability that the BoJ will scrap negative rates by March, with the odds jumping to 78% by April.

A softer than expected inflation report may support the argument around the economy being too weak for rate hikes, weakening the Yen as a result.

Should the inflation report print above expectations, this could boost the Yen as expectations mount over the BoJ ending negative rates.

US January PCE report

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

Traders are currently pricing in 79% probability of Fed rate cut by June, according to Fed fund futures.

The PCE core deflator is forecast to rise 0.4% month-over-month, from 0.2% in December while cooling 2.8% in January, down from 2.9% in the previous month.

Ultimately, more signs of cooling price pressures may boost bets around the Fed cutting interest rates down the road – hitting the dollar as a result.

If the PCE report prints above market forecasts, this could further dampen hopes for early rate cuts – pushing the USDJPY higher as a result.

Note: Looking beyond the PCE report and other key US data, it may be wise to keep an eye on the looming partial government shutdown.

The United States is facing another partial government shutdown deadline set to expire on 1st March. Should this become reality, it could impact the dollar and risk sentiment – reflecting on the USDJPY.

Technical forces

The USDJPY is firmly bullish on the daily timeframe as there have been consistently higher highs and higher lows. However, the Relative Strength Index (RSI) is approaching 70 – signalling that prices are overbought.

A solid weekly close above 150.90 may encourage an incline towards the 151.90 level.

Should bulls get cold feet below 150.90, this may trigger a selloff towards 149.70 and potentially lower.

Bloomberg’s FX model points to a 78% chance that USDJPY will trade within the 149.18 – 151.95 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

20 Feb

Trade Of The Week: EURUSD waits for directional spark

By ForexTime

EURUSD enters standby mode

EU data + ECB minutes in focus

USD volatility could trigger breakout

Key levels of interest at 1.0800 & 1.0700

After bouncing within a 100-pip range since early February, the world’s most-traded FX pair may be set for a big move.

The trend is bearish on the H4/daily timeframe but bulls have put up a good fight with support at 1.0700 and resistance at 1.0800.

It is a similar story on the weekly charts with the bullish pin bar signalling a potential reversal if prices push back above the 50-week SMA.

Nevertheless, the recent price action suggests that the EURUSD needs fresh motivation to trigger a potential breakout.

Here are 3 potential catalysts to keep an eye on:

EU data + ECB minutes

The euro could turn volatile from mid-week due to key EU data and the ECB meeting minutes.

Key reports in the form of the Eurozone consumer confidence and latest inflation readings among others may provide fresh insights on the future path of ECB interest rates. It will be wise to keep an eye on data from Germany, the largest economy in Europe.

Regarding the ECB minutes, investors are likely to closely scrutinise them for any clues on the timings of rate cuts.

Traders are currently pricing in a 45% probability of a 25-basis point rate cut by April, with a cut fully priced in by June.

These odds are likely to be influenced by the incoming data from Europe this week.

The EURUSD may push higher if overall EU economic data and minutes signal that the ECB may need more time before cutting interests.
Should economic data disappoint, inflation cools and the minutes sound dovish – the EURUSD may fall.

Fed minutes + speeches

The Fed minutes and speeches by Federal Reserve officials may inject renewed life into the dollar.

Although much has changed since the January meeting, it could provide investors with some insight into why Fed officials held off on cutting rates in March despite signs of cooling inflation. Speeches by Fed officials will be closely scrutinized by market players for fresh clues on the timings of Fed interest rate cuts.

Should the dollar end up weakening this week, the EURUSD is likely to push higher.
If the dollar strengthens as data and Fed officials further dampen hopes of early cuts, the EURUSD has the potential to tumble.

Technical forces

The EURUSD is bearish on the daily timeframe as 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.

A bearish daily close below 1.0800 may trigger a selloff back towards the 1.0700 support.
A strong breakout and daily close above 1.0800 may encourage a move towards the 200-day SMA at 1.0825 and resistance at 1.0869 just below the 50-day SMA.

According to Bloomberg’s FX forecast model, there’s a 78% chance that EURUSD trades within the 1.0687 – 1.0869 over the next week.

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

18 Feb

FX Speculators push British Pound bullish bets to 25-week high

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 February 13th 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 Sterling & Mexican Peso

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 British Pound (15,997 contracts) with the Mexican Peso (13,615 contracts), the New Zealand Dollar (2,577 contracts), Canadian Dollar (2,254 contracts) and the US Dollar Index (463 contracts) also having positive weeks.

The currencies seeing declines in speculator bets on the week were the Japanese Yen (-27,306 contracts), the EuroFX (-9,315 contracts), the Australian Dollar (-7,163 contracts), the Swiss Franc (-447 contracts), the Brazilian Real (-314 contracts) and Bitcoin (-398 contracts) also registering lower bets on the week.

FX Speculators push British Pound bullish bets to 25-week high

Highlighting the COT currency’s data is the continued rise in the speculator’s positioning of the British Pound Sterling.

Large speculative Sterling positions rose this week by almost +16,000 contracts and have gained in seven consecutive weeks. The Sterling speculative level has added a total of +36,380 contracts to the net position over these last seven weeks and has brought the net level from a total of +14,092 contracts on December 26th to this week’s currently standing of +50,472 contracts. This marks the most bullish position for the GBP speculators since August 22nd, a span of twenty-five weeks.

The Pound Sterling exchange rate (GBPUSD currency pair) against the US Dollar has been oscillating around the 1.2500 exchange level over the past week despite recent downbeat economic news. The UK economy has recently dipped into a technical recession with declining GDP in both the 3rd and 4th quarters of 2023. However, with inflation still high, traders and market watchers still see the Bank of England holding their interest rates at high levels which could provide support for the UK currency.

The Pound exchange continues to be in a weekly uptrend since a recent dive in October when prices were falling and dipped as low as 1.2050. The currency has also come down from the most recent high levels of the current uptrend (topping out around 1.2800) and has now settled in right above the 200-day moving average with this week’s close trading at 1.2609.

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 (91 percent) lead the currency markets this week. The New Zealand Dollar (64 percent), Brazilian Real (60 percent) and the Canadian Dollar (54 percent) come in as the next highest in the weekly strength scores.

On the downside, the Japanese Yen (12 percent) and the Australian Dollar (16 percent) come in at the lowest strength levels currently and are in Extreme-Bearish territory (below 20 percent). The next lowest strength scores are the US Dollar Index (27 percent) and Bitcoin (37 percent).

Strength Statistics:
US Dollar Index (26.9 percent) vs US Dollar Index previous week (26.1 percent)
EuroFX (42.8 percent) vs EuroFX previous week (46.8 percent)
British Pound Sterling (90.8 percent) vs British Pound Sterling previous week (79.7 percent)
Japanese Yen (11.8 percent) vs Japanese Yen previous week (29.0 percent)
Swiss Franc (41.8 percent) vs Swiss Franc previous week (43.0 percent)
Canadian Dollar (54.5 percent) vs Canadian Dollar previous week (52.6 percent)
Australian Dollar (16.5 percent) vs Australian Dollar previous week (23.0 percent)
New Zealand Dollar (64.3 percent) vs New Zealand Dollar previous week (57.6 percent)
Mexican Peso (100.0 percent) vs Mexican Peso previous week (91.7 percent)
Brazilian Real (59.6 percent) vs Brazilian Real previous week (60.0 percent)
Bitcoin (37.5 percent) vs Bitcoin previous week (43.5 percent)

British Pound & Canadian 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 British Pound (24 percent) and the Canadian Dollar (13 percent) lead the past six weeks trends for the currencies. The New Zealand Dollar (10 percent), the Mexican Peso (7 percent) and the Bitcoin (5 percent) are the next highest positive movers in the latest trends data.

The Japanese Yen (-34 percent) leads the downside trend scores currently with the Australian Dollar (-33 percent), the EuroFX (-28 percent) and the Brazilian Real (-19 percent) following next with lower trend scores.

Strength Trend Statistics:
US Dollar Index (-0.7 percent) vs US Dollar Index previous week (-2.7 percent)
EuroFX (-28.4 percent) vs EuroFX previous week (-23.5 percent)
British Pound Sterling (24.5 percent) vs British Pound Sterling previous week (14.1 percent)
Japanese Yen (-34.2 percent) vs Japanese Yen previous week (-18.0 percent)
Swiss Franc (-2.3 percent) vs Swiss Franc previous week (-6.1 percent)
Canadian Dollar (13.1 percent) vs Canadian Dollar previous week (22.6 percent)
Australian Dollar (-33.0 percent) vs Australian Dollar previous week (-18.8 percent)
New Zealand Dollar (10.3 percent) vs New Zealand Dollar previous week (11.7 percent)
Mexican Peso (6.9 percent) vs Mexican Peso previous week (-0.6 percent)
Brazilian Real (-19.4 percent) vs Brazilian Real previous week (-31.9 percent)
Bitcoin (4.5 percent) vs Bitcoin previous week (11.7 percent)