Forex and Currency News

Archive for Forex and Currency News – Page 59

New US credit rating downgrade further fuels fears of long-term dollar decline

By George Prior

The surprise US credit rating downgrade will trigger short-term volatility for the dollar – but more importantly, will speed-up the long-term decline of the US and global reserve currency, warns the CEO of one of the world’s largest independent financial advisory and asset management companies.

The warning from Nigel Green of deVere Group comes as rating agency Fitch downgraded the US government’s top credit rating on Tuesday to AA+ from AAA.

Fitch cited fiscal deterioration over the next three years and repeated down-the-wire debt ceiling negotiations that puts at risk the government’s ability to pay its bills.

The deVere CEO says: “Many US analysts are predicting that this surprise downgrade of the world’s largest economy’s credit rating will only trigger short term volatility for the dollar – and the US and global reserve currency wobbled on the news, as should have been expected.

“However, as this is the second major rating agency (after Standard & Poor’s) to strip the US of its triple-A rating, there are serious, legitimate questions to be asked about the long-term trajectory of the dollar.”

He continues: “No one can predict the future, but history unequivocally teaches us that nothing lasts forever. Global reserve currencies have come and gone before. It will happen again.

“Indeed, I believe that we are witnessing in real-time the world beginning to shift away from a dollar-dominated financial system.

“Among other reasons, this is because astronomic levels of debt, and the enormous amount of desperate money printing to monetise these debts, have caused the considerable drop in the long-term value of the currency.”

Earlier this year, Nigel Green was one of the first voices to flag the threat to the US dollar’s dominance as Russia and Saudi Arabia eye the Chinese yuan for oil trades.

He said one of the most significant, but under-reported, outcomes of a three-day summit between Russia’s Vladimir Putin and China’s Xi Jinping was that Putin said Russia is now in favour of using the Chinese yuan for oil settlements.

Separately, two deals, announced a week earlier, will see Saudi Arabia’s Aramco supplying two Chinese companies with a combined 690,000 barrels a day of crude oil, bolstering its rank as China’s top provider of the commodity. It was reported that Saudi Arabia was also in talks with Beijing to settle with the yuan instead of the dollar.

“It appears US rivals, led by China, are forming a new major economic bloc. If Saudi Arabia – home to massive oil reserves, which are estimated to be the largest in the world – does move to the yuan, that would lead to an enormous shift in the global economic system.

“Oil is one of the most important and widely traded commodities in the world, and it has traditionally been priced and traded in US dollars. This has given the US dollar a dominant role in global financial markets, as countries that want to purchase oil must first acquire US dollars in order to do so.

“If oil trading were to shift away from the US dollar, it would dramatically reduce the demand for US dollars, which would lead to a decrease in the value of the US currency.”

This could have a number of ripple effects throughout the global economy, including hugely increased inflation in the United States and potentially destabilising effects on financial markets.

Investors should begin to consider hedging against a declining dollar. Diversification across different currencies, investing in non-US assets, using derivatives, and investing in commodities and real estate are all considered effective ways to hedge against potential USD volatility.

The deVere CEO concludes: “While the latest report from Fitch will have a minimal impact, two major credit downgrades, industrial-scale money printing to monetise astronomic debts, and rivals like China and their allies looking to take the financial crown from the US, can be expected to speed-up the long-term decline of the dollar.”

About:

deVere Group is one of the world’s largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients. It has a network of more than 70 offices across the world, over 80,000 clients and $12bn under advisement.

Forex and Currency News Opinions

01 Aug

Japanese Yen Depreciated After the Bank of Japan Meeting Outcome

By RoboForex Analytical Department

The USD/JPY pair surpassed its local daily high of 141.95 on Monday and is currently trading near 143.00.

USD/JPY experienced increased volatility at the end of last week: it initially fell by about 2% on the Nikkei news report that the Bank of Japan (BOJ) might announce the beginning of normalising its “soft” monetary policy but then returned to the area of daily highs after the Bank of Japan announced the meeting outcome.

The BOJ kept the interest rate at -0.1% and did not raise the upper bound of yield on 10-year Japanese government bonds. In its issued statement, it noted that this limit is not a “dogma” but merely a reference serving as a guide to action.

As a result, the expectations of the Bank of Japan winding down its “soft” monetary policy due to rapidly rising inflation have not been confirmed yet. According to Bloomberg surveys, many economists and analysts expect the Bank of Japan to begin normalising monetary policy no earlier than October.

Technical analysis of the USD/JPY currency pair

On the H4 chart of USD/JPY, the calculated target for the fifth upward wave has been reached at 142.44. Today, the market is forming a consolidation range around this level. An expansion to 143.21 is not ruled out. Next, we will consider a decline to the level of 140.66, followed by a rise to 144.62. Technically, this scenario is confirmed by the MACD oscillator. Its signal line is trading above the zero mark and has exited the histogram zone. We expect the indicator to begin decreasing towards the zero level.

On the H1 chart of USD/JPY, a consolidation range has formed around the level of 140.66. After breaking above this range, the local target at 142.44 was achieved. Currently, the market is forming a consolidation range around this level. A potential upward move to the level of 143.23 is not excluded if there is a breakout above this range. In case of a downward breakout, we will assess the probability of a correction to 140.66, followed by a rise to 143.28. Technically, this scenario is supported by the Stochastic oscillator, with its signal line above the 80 mark, preparing to decline towards the 50 mark. After this anticipated decline, we expect another upward movement towards the 80 mark.

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

31 Jul

Trade Of The Week: GBPUSD Twitchy Ahead Of BoE

By ForexTime

Sterling could kick off the new trading month with a bang as focus falls on the Bank of England rate decision.

After posting a mixed performance across the G10 space in July and gaining roughly 1% versus the dollar, could volatility return in August?

Over the past few weeks, buying sentiment toward the currency has been influenced by conflicting forces – placing bulls and bears in a fierce tug of war. Pound bulls continue to draw strength from rising expectations over the BoE keeping rates higher for longer in the face of sticky inflation. But bears remain supported by growing recession fears as UK economic data disappoints. Regarding the technical picture, the GBPUSD has found itself back within a wide range with support at 1.2800 and resistance at 1.3000.

The GBPUSD could be gearing up for a major move this week and here are 3 reasons why:

1) BoE Rate Decision

The Bank of England (BoE) monetary policy decision will be on Thursday 3rd August.

This will be accompanied by the minutes of the meeting and the quarterly Monetary Policy Report (MPR), making it a Super Thursday combo.

Markets widely expected the BoE to raise interest rates by 25 basis points. This would be the fourteenth straight rate hike, taking the key rate to 5.25% – its highest level since 2008. Despite UK consumer price inflation dropping to 7.9% in June, it remains well above the BoE’s target. This is likely to fuel expectations around more rate hikes despite disappointing economic data fuelling recession fears.

Investors will be paying very close attention to the minutes, quarterly MPR, and BoE Governor Andrew Bailey’s press conference for fresh clues on the BoE’s next policy move.

If the BoE delivers a 25 basis point hike and signals further rate hikes in the face of still sticky inflation, this could support the GBPUSD.
If the BoE surprises markets by delivering a 50 basis points hike, this could inject Pound bulls with enough confidence to break out of its current range.
A scenario where the BoE delivers a dovish hike, expressing concern over the UK economy could send the Pound falling.

2) US Jobs report

All eyes will be on the US July nonfarm payrolls (NFP) on Friday which could offer critical insight into the Fed’s next move – especially when factoring in the central bank’s recent shift to data dependence.

The US economy is forecast to have added 190,000 new jobs to the labour markets in July while the unemployment rate is expected to remain unchanged at 3.6%. Given how the US report will act as one of the key pieces that determine whether the Fed raises rates one final time in 2023 or not, this could translate to increased dollar volatility.

A stronger-than-expected US jobs report may fuel speculation around the Federal Reserve raising interest rates one final time in 2023. Should this result in a stronger dollar, this could drag the GBPUSD lower.
A weaker-than-expected US jobs report could support the argument that the Federal Reserve ended its hiking cycle in July. If this sees the dollar weaken, the GBPUSD may push higher.

3) Technical forces

The GBPUSD remains in a bullish channel on the weekly timeframe. However, prices are trading around a significant pivotal point at 1.2850 just below the 200-week SMA. If bulls can keep above this level, and leverage this support to push beyond 1.3000, the next key resistance can be found around 1.3200. However, a breakdown below 1.2850 may see a decline towards the 100-week SMA at 1.2600.

On the daily charts, support can be found at 1.2800 and resistance at 1.3000. A solid breakout above 1.3000 may open the doors towards 1.3140 and 1.3200, respectively. Should prices slide below 1.2800, bears may target 1.2600.

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

30 Jul

US Dollar Speculators reduce their bullish bets to 2-Year low

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 July 25th and shows a quick view of how large market participants (for-profit speculators and commercial traders) were positioned in the futures markets. All currency positions are in direct relation to the US dollar where, for example, a bet for the euro is a bet that the euro will rise versus the dollar while a bet against the euro will be a bet that the euro will decline versus the dollar.

Weekly Speculator Changes led by Japanese Yen & Canadian Dollar

The COT currency market speculator bets were 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 Japanese Yen (12,487 contracts) with the Canadian Dollar (5,009 contracts), New Zealand Dollar (2,677 contracts), Swiss Franc (1,780 contracts) and Bitcoin (516 contracts) also showing positive weeks.

The currencies seeing declines in speculator bets on the week were the Mexican Peso (-6,651 contracts) with the US Dollar Index (-5,013 contracts), the British Pound (-4,734 contracts), EuroFX (-1,602 contracts), the Brazilian Real (-1,962 contracts) and the Australian Dollar (-800 contracts)also registering lower bets on the week.

US Dollar Index Bullish Bets fall to 2-Year Low

Highlighting the COT currency’s data this week is the decline of the speculator’s positioning in the US Dollar Index. The large speculative US Dollar Index positions decreased for a fourth consecutive week this week and the speculators have now subtracted a total of -8,914 net contracts from the overall position in just the last four weeks.

This week’s reduction by -5,013 contracts marked the largest one-week shortfall since December 20th of 2022 (which recorded a decline by -9,021 contracts). This bearishness has dropped the US Dollar Index speculator net position (currently at +6,054 contracts) to its lowest level of the past 108 weeks, dating back to June 29th of 2021.

Overall, the US Dollar speculator position has been weakening since hitting a cycle high on June 21st of 2022 with a total of +45,010 contracts. Since then, the steady and slow erosion of bullish bets has brought the net position to under the +10,000 contract level for just the second time in the past two years. This latest data is through Tuesday and before the US Federal Reserve’s latest rate increase by 25 basis points that took place on Wednesday. Speculators and market watchers are eyeing the end of the Fed’s interest rate hiking campaign as inflation has been falling across most measures in the US economy.

The US Dollar Index futures price closed higher this week for a second straight week and ended the week right around the 101.40 level. The USD Index had ascended to a multi-decade high of 114.74 in September 2022 and has been on the downtrend since with a current decline (from top to latest price) of approximately 12 percent. The USD Index price fell to a 14-month low on July 18th at 99.22 before staging a comeback over the past two weeks and making it back over the 100 level.

Data Snapshot of Forex Market Traders | Columns Legend

Jul-25-2023	OI	OI-Index	Spec-Net	Spec-Index	Com-Net	COM-Index	Smalls-Net	Smalls-Index
USD Index	34,514	20	6,054	35	-6,339	66	285	20
EUR	772,408	75	177,230	87	-234,269	11	57,039	70
GBP	237,340	60	58,995	97	-76,984	3	17,989	93
JPY	223,760	57	-77,752	24	86,555	78	-8,803	36
CHF	44,180	50	-8,431	32	3,421	51	5,010	74
CAD	156,395	31	5,530	60	-22,096	41	16,566	60
AUD	146,423	28	-51,201	37	49,561	56	1,640	56
NZD	36,820	25	-949	51	32	47	917	61
MXN	233,549	49	87,841	93	-92,058	7	4,217	38
RUB	20,930	4	7,543	31	-7,150	69	-393	24
BRL	53,443	44	31,971	76	-31,957	25	-14	44
Bitcoin	16,017	77	-645	66	-178	0	823	32

Strength Scores led by British Pound & Mexican Peso

COT Strength Scores (a normalized measure of Speculator positions over a 3-Year range, from 0 to 100 where above 80 is Extreme-Bullish and below 20 is Extreme-Bearish) showed that the British Pound (97 percent) and the Mexican Peso (93 percent) lead the currency markets this week. The EuroFX (87 percent), Brazilian Real (76 percent) and the Bitcoin (66 percent) come in as the next highest in the weekly strength scores.

On the downside, the Japanese Yen (24 percent) and the Swiss Franc (32 percent) come in at the lowest strength levels currently. The next lowest strength scores are the US Dollar Index (35 percent) and the Australian Dollar (37 percent).

Strength Statistics:
US Dollar Index (35.0 percent) vs US Dollar Index previous week (43.4 percent)
EuroFX (86.7 percent) vs EuroFX previous week (87.3 percent)
British Pound Sterling (96.7 percent) vs British Pound Sterling previous week (100.0 percent)
Japanese Yen (23.8 percent) vs Japanese Yen previous week (16.4 percent)
Swiss Franc (32.3 percent) vs Swiss Franc previous week (27.6 percent)
Canadian Dollar (59.7 percent) vs Canadian Dollar previous week (55.0 percent)
Australian Dollar (37.4 percent) vs Australian Dollar previous week (38.1 percent)
New Zealand Dollar (51.0 percent) vs New Zealand Dollar previous week (43.8 percent)
Mexican Peso (92.8 percent) vs Mexican Peso previous week (96.8 percent)
Brazilian Real (76.4 percent) vs Brazilian Real previous week (78.9 percent)
Bitcoin (65.7 percent) vs Bitcoin previous week (56.7 percent)

Canadian 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 Canadian Dollar (39 percent) and the British Pound (36 percent) lead the past six weeks trends for the currencies. The Japanese Yen (16 percent), the EuroFX (10 percent) and the Australian Dollar (10 percent) are the next highest positive movers in the latest trends data.

The Bitcoin (-24 percent) leads the downside trend scores currently with the US Dollar Index (-13 percent), Swiss Franc (-9 percent) and the New Zealand Dollar (0 percent) following next with lower trend scores.

Strength Trend Statistics:
US Dollar Index (-13.2 percent) vs US Dollar Index previous week (-1.9 percent)
EuroFX (9.8 percent) vs EuroFX previous week (7.9 percent)
British Pound Sterling (36.3 percent) vs British Pound Sterling previous week (35.6 percent)
Japanese Yen (15.6 percent) vs Japanese Yen previous week (8.7 percent)
Swiss Franc (-9.0 percent) vs Swiss Franc previous week (-23.5 percent)
Canadian Dollar (39.3 percent) vs Canadian Dollar previous week (36.2 percent)
Australian Dollar (9.8 percent) vs Australian Dollar previous week (5.6 percent)
New Zealand Dollar (-0.3 percent) vs New Zealand Dollar previous week (-7.9 percent)
Mexican Peso (5.5 percent) vs Mexican Peso previous week (7.8 percent)
Brazilian Real (7.4 percent) vs Brazilian Real previous week (9.9 percent)
Bitcoin (-24.2 percent) vs Bitcoin previous week (-33.7 percent)

Individual COT Forex Markets:

US Dollar Index Futures:

The US Dollar Index large speculator standing this week totaled a net position of 6,054 contracts in the data reported through Tuesday. This was a weekly decrease of -5,013 contracts from the previous week which had a total of 11,067 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 35.0 percent. The commercials are Bullish with a score of 65.7 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 19.6 percent.

Price Trend-Following Model: Weak Uptrend

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

US DOLLAR INDEX Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	61.6	22.6	10.8
– Percent of Open Interest Shorts:	44.1	41.0	10.0
– Net Position:	6,054	-6,339	285
– Gross Longs:	21,258	7,796	3,735
– Gross Shorts:	15,204	14,135	3,450
– Long to Short Ratio:	1.4 to 1	0.6 to 1	1.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	35.0	65.7	19.6
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-13.2	16.4	-26.3

Euro Currency Futures:

The Euro Currency large speculator standing this week totaled a net position of 177,230 contracts in the data reported through Tuesday. This was a weekly lowering of -1,602 contracts from the previous week which had a total of 178,832 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 86.7 percent. The commercials are Bearish-Extreme with a score of 11.4 percent and the small traders (not shown in chart) are Bullish with a score of 70.0 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:	32.5	52.1	12.6
– Percent of Open Interest Shorts:	9.5	82.5	5.2
– Net Position:	177,230	-234,269	57,039
– Gross Longs:	250,647	402,626	97,545
– Gross Shorts:	73,417	636,895	40,506
– Long to Short Ratio:	3.4 to 1	0.6 to 1	2.4 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	86.7	11.4	70.0
– Strength Index Reading (3 Year Range):	Bullish-Extreme	Bearish-Extreme	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	9.8	-12.5	18.8

British Pound Sterling Futures:

The British Pound Sterling large speculator standing this week totaled a net position of 58,995 contracts in the data reported through Tuesday. This was a weekly decrease of -4,734 contracts from the previous week which had a total of 63,729 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 96.7 percent. The commercials are Bearish-Extreme with a score of 2.6 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 93.3 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:	44.5	31.9	17.6
– Percent of Open Interest Shorts:	19.6	64.3	10.0
– Net Position:	58,995	-76,984	17,989
– Gross Longs:	105,498	75,737	41,762
– Gross Shorts:	46,503	152,721	23,773
– Long to Short Ratio:	2.3 to 1	0.5 to 1	1.8 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	96.7	2.6	93.3
– Strength Index Reading (3 Year Range):	Bullish-Extreme	Bearish-Extreme	Bullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	36.3	-32.7	12.0

Japanese Yen Futures:

The Japanese Yen large speculator standing this week totaled a net position of -77,752 contracts in the data reported through Tuesday. This was a weekly increase of 12,487 contracts from the previous week which had a total of -90,239 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 23.8 percent. The commercials are Bullish with a score of 77.9 percent and the small traders (not shown in chart) are Bearish with a score of 35.6 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.

JAPANESE YEN Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	13.6	72.0	13.4
– Percent of Open Interest Shorts:	48.3	33.3	17.4
– Net Position:	-77,752	86,555	-8,803
– Gross Longs:	30,358	161,166	30,040
– Gross Shorts:	108,110	74,611	38,843
– Long to Short Ratio:	0.3 to 1	2.2 to 1	0.8 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	23.8	77.9	35.6
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	15.6	-15.4	11.0

Swiss Franc Futures:

The Swiss Franc large speculator standing this week totaled a net position of -8,431 contracts in the data reported through Tuesday. This was a weekly gain of 1,780 contracts from the previous week which had a total of -10,211 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 32.3 percent. The commercials are Bullish with a score of 50.6 percent and the small traders (not shown in chart) are Bullish with a score of 74.5 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.

SWISS FRANC Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	17.7	38.0	43.1
– Percent of Open Interest Shorts:	36.7	30.3	31.8
– Net Position:	-8,431	3,421	5,010
– Gross Longs:	7,804	16,787	19,044
– Gross Shorts:	16,235	13,366	14,034
– Long to Short Ratio:	0.5 to 1	1.3 to 1	1.4 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	32.3	50.6	74.5
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-9.0	-6.0	23.7

Canadian Dollar Futures:

The Canadian Dollar large speculator standing this week totaled a net position of 5,530 contracts in the data reported through Tuesday. This was a weekly rise of 5,009 contracts from the previous week which had a total of 521 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 59.7 percent. The commercials are Bearish with a score of 41.1 percent and the small traders (not shown in chart) are Bullish with a score of 59.6 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:	27.3	47.0	25.2
– Percent of Open Interest Shorts:	23.8	61.1	14.6
– Net Position:	5,530	-22,096	16,566
– Gross Longs:	42,759	73,539	39,413
– Gross Shorts:	37,229	95,635	22,847
– Long to Short Ratio:	1.1 to 1	0.8 to 1	1.7 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	59.7	41.1	59.6
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	39.3	-35.0	20.6

Australian Dollar Futures:

The Australian Dollar large speculator standing this week totaled a net position of -51,201 contracts in the data reported through Tuesday. This was a weekly reduction of -800 contracts from the previous week which had a total of -50,401 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 37.4 percent. The commercials are Bullish with a score of 55.9 percent and the small traders (not shown in chart) are Bullish with a score of 56.4 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:	26.7	54.8	16.2
– Percent of Open Interest Shorts:	61.7	21.0	15.1
– Net Position:	-51,201	49,561	1,640
– Gross Longs:	39,108	80,237	23,735
– Gross Shorts:	90,309	30,676	22,095
– Long to Short Ratio:	0.4 to 1	2.6 to 1	1.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	37.4	55.9	56.4
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	9.8	-18.2	33.7

New Zealand Dollar Futures:

The New Zealand Dollar large speculator standing this week totaled a net position of -949 contracts in the data reported through Tuesday. This was a weekly boost of 2,677 contracts from the previous week which had a total of -3,626 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 51.0 percent. The commercials are Bearish with a score of 46.6 percent and the small traders (not shown in chart) are Bullish with a score of 60.9 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.

NEW ZEALAND DOLLAR Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	35.1	53.4	11.1
– Percent of Open Interest Shorts:	37.7	53.3	8.6
– Net Position:	-949	32	917
– Gross Longs:	12,933	19,664	4,080
– Gross Shorts:	13,882	19,632	3,163
– Long to Short Ratio:	0.9 to 1	1.0 to 1	1.3 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	51.0	46.6	60.9
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-0.3	-11.4	58.8

Mexican Peso Futures:

The Mexican Peso large speculator standing this week totaled a net position of 87,841 contracts in the data reported through Tuesday. This was a weekly decrease of -6,651 contracts from the previous week which had a total of 94,492 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 92.8 percent. The commercials are Bearish-Extreme with a score of 6.5 percent and the small traders (not shown in chart) are Bearish with a score of 38.1 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:	50.4	45.4	3.7
– Percent of Open Interest Shorts:	12.8	84.8	1.9
– Net Position:	87,841	-92,058	4,217
– Gross Longs:	117,732	106,061	8,608
– Gross Shorts:	29,891	198,119	4,391
– Long to Short Ratio:	3.9 to 1	0.5 to 1	2.0 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	92.8	6.5	38.1
– Strength Index Reading (3 Year Range):	Bullish-Extreme	Bearish-Extreme	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	5.5	0.4	-61.9

Brazilian Real Futures:

The Brazilian Real large speculator standing this week totaled a net position of 31,971 contracts in the data reported through Tuesday. This was a weekly reduction of -1,962 contracts from the previous week which had a total of 33,933 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 76.4 percent. The commercials are Bearish with a score of 25.3 percent and the small traders (not shown in chart) are Bearish with a score of 43.9 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.

BRAZIL REAL Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	68.0	20.7	9.5
– Percent of Open Interest Shorts:	8.2	80.5	9.5
– Net Position:	31,971	-31,957	-14
– Gross Longs:	36,345	11,073	5,084
– Gross Shorts:	4,374	43,030	5,098
– Long to Short Ratio:	8.3 to 1	0.3 to 1	1.0 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	76.4	25.3	43.9
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	7.4	-9.2	13.2

Bitcoin Futures:

The Bitcoin large speculator standing this week totaled a net position of -645 contracts in the data reported through Tuesday. This was a weekly rise of 516 contracts from the previous week which had a total of -1,161 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 65.7 percent. The commercials are Bearish with a score of 49.5 percent and the small traders (not shown in chart) are Bearish with a score of 31.7 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.

BITCOIN Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	74.6	2.6	9.4
– Percent of Open Interest Shorts:	78.6	3.7	4.2
– Net Position:	-645	-178	823
– Gross Longs:	11,941	422	1,503
– Gross Shorts:	12,586	600	680
– Long to Short Ratio:	0.9 to 1	0.7 to 1	2.2 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	65.7	49.5	31.7
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-24.2	38.9	8.6

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

27 Jul

Japanese Candlesticks Analysis 27.07.2023 (XAUUSD, NZDUSD, GBPUSD)

By RoboForex.com

XAUUSD, “Gold vs US Dollar”

Gold has formed a Shooting Star reversal pattern near the resistance level. Currently, the instrument could go by the reversal signal in a descending wave. The correction target might be 1965.50. Upon testing the support, the price might rebound and continue the uptrend. However, the quotes could rise to 1990.00 without a correction.

NZDUSD, “New Zealand Dollar vs US Dollar”

NZDUSD has formed a Hammer reversal pattern on H4. Currently, the instrument is going by the reversal signal in an ascending wave. The growth target might be 0.6300. Upon breaking the resistance, the quotes might have a chance to continue the uptrend. However, a correction to 0.6190 might develop and an uptrend might follow the pullback.

GBPUSD, “Great Britain Pound vs US Dollar”

GBPUSD has formed a Hammer reversal pattern near the support level on H4. Currently, the instrument is going by the reversal signal in an ascending wave. The growth target might be 1.3055. However, the price might correct to 1.2895 and continue the uptrend following the pullback.

Article By RoboForex.com

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

Financial News Forex and Currency News

26 Jul

AUD remains highly volatile. Overview for 26.07.2023

By RoboForex.com

The Australian dollar, paired with the US dollar, is once again facing pressure. The current AUDUSD quote is 0.6759.

The Aussie’s volatility is drawing attention. On one hand, a strong US dollar exerts pressure on the AUD. On the other hand, China is sending quite positive signals.

Today’s statistics revealed that inflation in Australia for the second quarter declined to 5.4% year-over-year. On a quarterly basis, the indicator rose by 0.8% following a 1.4% increase from January to March this year. The easing of inflationary pressure is a positive signal. The Reserve Bank of Australia is likely to acknowledge this at its next meeting and keep the interest rate unchanged. The Australian dollar is reacting precisely to this development.

China’s readiness to stimulate its economy is favourable for Australia. As Australia’s primary trading and economic partner, all positive news coming from China is also encouraging for the AUD.

Article By RoboForex.com

Financial News Forex and Currency News

26 Jul

Mid-Week Technical Outlook: Calm Before Fed Storm?

By ForexTime

USD shaky ahead of Fed
USDJPY pressured below 141
SPX500_m preparing to breakout?
NQ100_m still in uptrend
Gold climbs beyond $1970

An air of tension settled over financial markets on Wednesday as investors braced for the pivotal Federal Reserve rate decision.

Global equities struggled for direction amid the growing caution, with European shares and US futures mixed as investors turned to the sidelines. Although the Fed is widely expected to raise interest rates by 25 basis points today, the key question is whether this will be the hike that concludes its aggressive campaign against inflation. Whatever the outcome of today’s policy meeting, it has the potential to rock financial markets.

Here are some technical setups to keep an eye on ahead of the Fed decision:

Dollar shaky and vulnerable

The dollar has weakened against all G10 currencies this morning, with prices testing the 101.10 level. As discussed throughout the week, the pending Fed decision is likely to heavily influence the dollar’s short to medium-term outlook. A strong breakdown below 101.10 may open the doors towards 100.72 and 100.00. Should prices push back above 101.50, the next key level of interest can be found at 102.35.

EURUSD rebound or breakdown?

After rebounding from the 1.1032 region yesterday, the euro has extended gains this morning with bulls eyeing 1.1090. A solid breakout above this point may re-open a path back towards 1.12750. Should prices slip back below 1.1032, bears may target 1.0950.

GBPUSD to resume uptrend?

Wednesday’s strong bullish daily candle could be early signs of GBPUSD bulls returning to the scene. Indeed, prices remain in a bullish trend with the MACD trading to the upside. A move towards 1.3000 could be on the cards if 1.2810 proves to be reliable support. Alternatively, a break below this point may trigger a selloff toward the 50-day Simple Moving Average.

USDJPY pressured below 141.00

USDJPY bears seem to be slowly creeping back into the scene, especially after prices broke through the 141.00 level. Dollar weakness could drag the currency pair towards 138.80 and 138.00, respectively. If prices can push back above 141.00, bulls could challenge 141.90 once again.

SPX500_m breakout alert?

Expect the SPX500_m to be rocked by earnings releases from the largest companies in the world. The index remains bullish on the daily charts with resistance found at 4580. A strong breakout and daily close above this point could trigger a move toward 4640. Sustained weakness below 4580 could see prices test 4500 and 4463.

NQ100_m still in uptrend

Our trade of the week remains in an uptrend on the daily charts. A strong move above 15700 could inspire a move towards 15947. Should prices slip back under 15300, the selloff may take the index towards 14965.

Gold gearing to push higher?

After kicking off the week on a rocky note, gold bulls seem to have their footing with prices trading above the sticky $1960 level. Should this rebound build momentum, this could take the precious metal towards $1985 and $2000. On the other hand, a decline back below $1955 may see prices test $1940 and $1932.

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

23 Jul

Euro and Japanese Yen Speculator Bets Jump this week

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 July 18th and shows a quick view of how large market participants (for-profit speculators and commercial traders) were positioned in the futures markets. All currency positions are in direct relation to the US dollar where, for example, a bet for the euro is a bet that the euro will rise versus the dollar while a bet against the euro will be a bet that the euro will decline versus the dollar.

Weekly Speculator Changes led by Euro & Japanese Yen

The COT currency market speculator bets were a bit 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 (38,670 contracts) with the Japanese Yen (26,943 contracts), the British Pound (5,666 contracts), the Brazilian Real (735 contracts) and Bitcoin (694 contracts) also showing positive weeks.

The currencies seeing declines in speculator bets on the week were the Australian Dollar (-5,317 contracts), the Canadian Dollar (-3,923 contracts), the New Zealand Dollar (-2,375 contracts), the Swiss Franc (-2,304 contracts), the Mexican Peso (-1,674 contracts) and the US Dollar Index (-944 contracts) also registering lower bets on the week.

Euro and Japanese Yen Speculator Bets Jump this week

Highlighting the COT currency’s data is the strength of this week’s moves in the speculator’s positioning of the Euro and Japanese Yen.

Large speculative Euro positions jumped this week by over +38,000 contracts and reversed a recent decline for the Euro positions in seven out of the previous eight weeks. This gain in bullish bets has pushed the overall net speculator position to the most bullish level of the past nine weeks at a total of +178,832 contracts.

The Euro currency’s strength has been on display over the past few months as the EURUSD exchange rate touched a one-year high this week at over the 1.1300 level. The EURUSD did close the week lower after hitting the one-year high but is now quite a ways off the 2022 low of 0.9508 that was touched in September.

The large speculative yen positions also surged this week by over +26,000 net contracts and gained for the second week in a row. The yen speculator positioning has been quite the opposite of the Euro as the Bank of Japan has maintained a policy of no interest rate increases which has prompted speculators to have large bearish positions in the yen. The speculator position on July 3rd marked the most bearish level since January of 2018 at a total of -117,920 contracts.

The yen positions in the past two weeks have improved though and this week’s gain brings the current bearish position (at -90,239 contracts) under the -100,000 contract threshold for the first time since May.

The yen’s exchange rate versus the US Dollar remains historically weak and in a downtrend in our trend model. The USDJPY exchange rate rose back over the 140.00 threshold this week (US Dollar strength/Japanese Yen weakness) after dipping below that level last week.

This upcoming week will be a potentially volatile week in currencies as the Bank of Japan and the US Federal Reserve will have central bank meetings and announce their respective policy outlooks.

Data Snapshot of Forex Market Traders | Columns Legend

Jul-18-2023	OI	OI-Index	Spec-Net	Spec-Index	Com-Net	COM-Index	Smalls-Net	Smalls-Index
USD Index	41,045	37	11,067	43	-11,617	57	550	23
EUR	783,132	80	178,832	87	-229,343	13	50,511	60
GBP	265,766	77	63,729	100	-81,606	0	17,877	93
JPY	230,932	63	-90,239	16	98,195	84	-7,956	37
CHF	43,213	47	-10,211	28	5,927	55	4,284	72
CAD	146,171	23	521	55	-12,991	47	12,470	50
AUD	148,592	35	-50,401	38	51,045	57	-644	51
NZD	39,402	32	-3,626	44	938	49	2,688	82
MXN	238,006	51	94,492	97	-98,239	3	3,747	35
RUB	20,930	4	7,543	31	-7,150	69	-393	24
BRL	48,146	37	33,933	79	-32,196	25	-1,737	30
Bitcoin	15,455	73	-1,161	57	196	0	965	35

Strength Scores led by British Pound & Mexican Peso

COT Strength Scores (a normalized measure of Speculator positions over a 3-Year range, from 0 to 100 where above 80 is Extreme-Bullish and below 20 is Extreme-Bearish) showed that the British Pound (100 percent) and the Mexican Peso (97 percent) lead the currency markets this week. The EuroFX (87 percent), Brazilian Real (79 percent) and the Bitcoin (57 percent) come in as the next highest in the weekly strength scores.

On the downside, the Japanese Yen (16 percent) and the Swiss Franc (28 percent) come in at the lowest strength levels currently. The next lowest strength scores are the Australian Dollar (38 percent) and the US Dollar Index (43 percent).

Strength Statistics:
US Dollar Index (43.4 percent) vs US Dollar Index previous week (45.0 percent)
EuroFX (87.3 percent) vs EuroFX previous week (72.4 percent)
British Pound Sterling (100.0 percent) vs British Pound Sterling previous week (96.1 percent)
Japanese Yen (16.4 percent) vs Japanese Yen previous week (0.4 percent)
Swiss Franc (27.6 percent) vs Swiss Franc previous week (33.7 percent)
Canadian Dollar (55.0 percent) vs Canadian Dollar previous week (58.7 percent)
Australian Dollar (38.1 percent) vs Australian Dollar previous week (43.0 percent)
New Zealand Dollar (43.8 percent) vs New Zealand Dollar previous week (50.2 percent)
Mexican Peso (96.8 percent) vs Mexican Peso previous week (97.8 percent)
Brazilian Real (78.9 percent) vs Brazilian Real previous week (78.0 percent)
Bitcoin (56.7 percent) vs Bitcoin previous week (44.6 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 (36 percent) and the Canadian Dollar (36 percent) lead the past six weeks trends for the currencies. The Brazilian Real (10 percent), the Japanese Yen (9 percent) and the EuroFX (8 percent) are the next highest positive movers in the latest trends data.

Bitcoin (-34 percent) leads the downside trend scores currently with the Swiss Franc (-24 percent), New Zealand Dollar (-8 percent) and the US Dollar Index (-2 percent) following next with lower trend scores.

Strength Trend Statistics:
US Dollar Index (-1.9 percent) vs US Dollar Index previous week (-1.3 percent)
EuroFX (7.9 percent) vs EuroFX previous week (-9.9 percent)
British Pound Sterling (35.6 percent) vs British Pound Sterling previous week (31.1 percent)
Japanese Yen (8.7 percent) vs Japanese Yen previous week (-12.5 percent)
Swiss Franc (-23.5 percent) vs Swiss Franc previous week (-19.8 percent)
Canadian Dollar (36.2 percent) vs Canadian Dollar previous week (32.0 percent)
Australian Dollar (5.6 percent) vs Australian Dollar previous week (-0.9 percent)
New Zealand Dollar (-7.9 percent) vs New Zealand Dollar previous week (-3.0 percent)
Mexican Peso (7.8 percent) vs Mexican Peso previous week (11.1 percent)
Brazilian Real (9.9 percent) vs Brazilian Real previous week (2.4 percent)
Bitcoin (-33.7 percent) vs Bitcoin previous week (-35.6 percent)