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USDJPY pauses, but this is temporary

The USDJPY pair halted its decline around 142.98 on Monday. However, this pause in the yen’s rally should not be misleading, as it comes amid uncertainty surrounding the extent of the anticipated monetary policy easing by the US Federal Reserve. The latest US employment report provided little information for adjusting forecasts of the Fed’s interest rate trajectory. Investors must assess fresh inflation data this week before drawing any fundamental conclusions.

Over the past week, the JPY strengthened by almost 3.0% against the US dollar. The USDJPY pair dropped to its annual low amid expectations of decisive action from the Bank of Japan. The BoJ is expected to raise rates by the end of the year, which will be supported by steady economic growth, wage increases, and ongoing inflationary pressure.

If the Bank of Japan’s monetary policymakers’ projections regarding macroeconomic aspects materialise, the central bank will be ready to adjust its monetary policy parameters more actively. Meanwhile, the latest data reflected weak GDP growth in Japan in Q2. The economy expanded by only 2.9% year-on-year, compared to the preliminary estimate of 3.1%.

Technical analysis of USDJPY

On the H4 chart, USD/JPY has formed a consolidation range around the 143.43 level. Due to recent news, the range has widened upwards to 144.00 and downwards to 141.76. Today, a rise towards the 143.43 level (testing from below) is possible, followed by a decline towards 141.70. Breaking this level could signal a continuation of the trend towards 139.70, with the potential for further development towards 137.77. This scenario is technically supported by the MACD indicator, whose signal line is below zero and pointing sharply downwards.

On the H1 chart, USD/JPY completed a downward impulse towards 141.76 and a subsequent rise to 143.00. A new consolidation range has almost formed. Today, a breakout below the lower boundary of this range is likely, with the downward wave continuing towards 140.30 and potentially further towards 139.70. After reaching this level, a correction towards 143.43 is possible. This scenario is also technically supported by the Stochastic oscillator, whose signal line is above 80 and pointing sharply downwards.

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

07 Sep

Currency Speculators push Canadian Dollar, British Pound & Yen bets higher for multiple weeks

By InvestMacro

Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC).

The latest COT data is updated through Tuesday September 3rd 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 CAD, GBP & JPY

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

Leading the gains for the currency markets was the Canadian Dollar (41,458 contracts) with the British Pound (18,147 contracts), the Japanese Yen (15,248 contracts), the Australian Dollar (11,295 contracts), the New Zealand Dollar (8,078 contracts), the EuroFX (7,180 contracts), the Swiss Franc (2,730 contracts), the Brazilian Real (2,152 contracts), the US Dollar Index (516 contracts) and with Bitcoin (274 contracts) also having a positive week.

The only currency seeing a decline in speculator bets was the Mexican Peso with a small reduction by -241 contracts on the week.

Speculators push Canadian Dollar, British pound & Yen bets higher for multiple weeks

Highlighting this week’s currency data roundup is the continued gains for the Canadian dollar, British pound and the Japanese yen.

The Canadian dollar speculative position continued to improve this week and rose for a fifth consecutive week. The total gain over the past 5-weeks is now +127,719 contracts after the speculative position had fallen to an all-time low on July 30th at a total of -196,263 contracts. The current CAD positioning remains bearish for a 57th consecutive week but the speculator bets this week sit at a total of -68,544 contracts which is the least bearish level since April 30th. The Canadian dollar exchange rate versus the US dollar dipped this week following four straight weeks of gains that has taken the CADUSD over its 200-day moving average.

The British pound sterling speculator contracts rose strongly again this week (+18,147 contracts) and increased for a third straight week. The overall bullish position standing is back over the +100,000 net contract level after falling below this level in the previous four weeks. The GBP speculator bets recently rose to an all-time most bullish level on record on July 23rd with a total of +142,183 contracts. The top four most bullish levels on record have been in the past few months after eclipsing the previous high of +98,366 contracts that took place way back in July of 2007. The pound sterling exchange rate against the US dollar has been on the uptrend with increases in three out of the past four weeks. Last week, the GBPUSD rose to the best level since March of 2022 above the 1.3280 threshold.

The Japanese yen speculator bets also continued to gain this week and have now advanced for nine straight weeks. The speculative positioning for the yen had fallen to the second most bearish level on July 2nd at a total of -184,223 contracts but since then has seen a sharp turnaround. Over the last nine weeks, a total of +225,339 net contracts have come off that bearish mark and flipped the overall positioning into a bullish level at this week’s standing of +41,116 contracts – the best level since early 2021. The yen exchange rate has risen for six out of the past nine weeks versus the US dollar and is up by over 12 percent in that time-frame.

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 Japanese Yen & 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 Japanese Yen (100 percent) and the British Pound (85 percent) lead the currency markets this week. The Australian Dollar (84 percent), Bitcoin (68 percent) and the EuroFX (63 percent) come in as the next highest in the weekly strength scores.

On the downside, the Brazilian Real (4 percent) comes in at the lowest strength levels currently and is in Extreme-Bearish territory (below 20 percent). The next lowest strength scores are the New Zealand Dollar (40 percent), the US Dollar Index (45 percent) and the Mexican Peso (46 percent).

Strength Statistics:
US Dollar Index (45.5 percent) vs US Dollar Index previous week (44.4 percent)
EuroFX (62.9 percent) vs EuroFX previous week (59.9 percent)
British Pound Sterling (84.7 percent) vs British Pound Sterling previous week (76.5 percent)
Japanese Yen (100.0 percent) vs Japanese Yen previous week (93.2 percent)
Swiss Franc (56.5 percent) vs Swiss Franc previous week (51.0 percent)
Canadian Dollar (57.2 percent) vs Canadian Dollar previous week (38.7 percent)
Australian Dollar (84.0 percent) vs Australian Dollar previous week (74.5 percent)
New Zealand Dollar (40.4 percent) vs New Zealand Dollar previous week (24.9 percent)
Mexican Peso (46.4 percent) vs Mexican Peso previous week (46.5 percent)
Brazilian Real (3.9 percent) vs Brazilian Real previous week (1.8 percent)
Bitcoin (68.0 percent) vs Bitcoin previous week (63.9 percent)

Japanese Yen & 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 Japanese Yen (66 percent) and the Canadian Dollar (42 percent) lead the past six weeks trends for the currencies. The Swiss Franc (41 percent), the EuroFX (27 percent) and Bitcoin (12 percent) are the next highest positive movers in the latest trends data.

The Mexican Peso (-19 percent) leads the downside trend scores currently with the British Pound (-15 percent), the New Zealand Dollar (-9 percent) and the Brazilian Real (-8 percent) following next with lower trend scores.

Strength Trend Statistics:
US Dollar Index (2.6 percent) vs US Dollar Index previous week (0.8 percent)
EuroFX (27.3 percent) vs EuroFX previous week (29.0 percent)
British Pound Sterling (-15.3 percent) vs British Pound Sterling previous week (-19.3 percent)
Japanese Yen (65.8 percent) vs Japanese Yen previous week (78.5 percent)
Swiss Franc (41.2 percent) vs Swiss Franc previous week (51.0 percent)
Canadian Dollar (41.7 percent) vs Canadian Dollar previous week (10.1 percent)
Australian Dollar (0.8 percent) vs Australian Dollar previous week (-25.5 percent)
New Zealand Dollar (-9.1 percent) vs New Zealand Dollar previous week (-40.1 percent)
Mexican Peso (-19.1 percent) vs Mexican Peso previous week (-15.2 percent)
Brazilian Real (-8.4 percent) vs Brazilian Real previous week (-8.0 percent)
Bitcoin (11.6 percent) vs Bitcoin previous week (6.2 percent)

Individual COT Forex Markets:

US Dollar Index Futures:

The US Dollar Index large speculator standing this week came in at a net position of 19,429 contracts in the data reported through Tuesday. This was a weekly advance of 516 contracts from the previous week which had a total of 18,913 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 45.5 percent. The commercials are Bullish with a score of 62.9 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 0.0 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: Hold – Maintain Short Position.

US DOLLAR INDEX Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	71.5	20.5	4.6
– Percent of Open Interest Shorts:	31.5	57.3	7.7
– Net Position:	19,429	-17,906	-1,523
– Gross Longs:	34,725	9,933	2,233
– Gross Shorts:	15,296	27,839	3,756
– Long to Short Ratio:	2.3 to 1	0.4 to 1	0.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	45.5	62.9	0.0
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	2.6	2.1	-24.2

Euro Currency Futures:

The Euro Currency large speculator standing this week came in at a net position of 100,018 contracts in the data reported through Tuesday. This was a weekly rise of 7,180 contracts from the previous week which had a total of 92,838 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 Bullish with a score of 62.9 percent. The commercials are Bearish with a score of 36.2 percent and the small traders (not shown in chart) are Bullish with a score of 64.7 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.

EURO Currency Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	29.2	54.4	11.5
– Percent of Open Interest Shorts:	15.7	73.5	5.9
– Net Position:	100,018	-141,548	41,530
– Gross Longs:	215,969	402,899	85,362
– Gross Shorts:	115,951	544,447	43,832
– Long to Short Ratio:	1.9 to 1	0.7 to 1	1.9 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	62.9	36.2	64.7
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	27.3	-30.6	40.0

British Pound Sterling Futures:

The British Pound Sterling large speculator standing this week came in at a net position of 108,078 contracts in the data reported through Tuesday. This was a weekly rise of 18,147 contracts from the previous week which had a total of 89,931 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 84.7 percent. The commercials are Bearish-Extreme with a score of 13.3 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 89.3 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.

BRITISH POUND Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	56.3	24.5	13.9
– Percent of Open Interest Shorts:	18.5	66.9	9.4
– Net Position:	108,078	-120,955	12,877
– Gross Longs:	160,773	69,973	39,617
– Gross Shorts:	52,695	190,928	26,740
– Long to Short Ratio:	3.1 to 1	0.4 to 1	1.5 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	84.7	13.3	89.3
– Strength Index Reading (3 Year Range):	Bullish-Extreme	Bearish-Extreme	Bullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-15.3	13.3	1.7

Japanese Yen Futures:

The Japanese Yen large speculator standing this week came in at a net position of 41,116 contracts in the data reported through Tuesday. This was a weekly gain of 15,248 contracts from the previous week which had a total of 25,868 net contracts.

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

JAPANESE YEN Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	28.1	57.9	11.7
– Percent of Open Interest Shorts:	15.5	72.2	9.9
– Net Position:	41,116	-46,765	5,649
– Gross Longs:	91,791	189,291	38,134
– Gross Shorts:	50,675	236,056	32,485
– Long to Short Ratio:	1.8 to 1	0.8 to 1	1.2 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	100.0	0.0	100.0
– Strength Index Reading (3 Year Range):	Bullish-Extreme	Bearish-Extreme	Bullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	65.8	-64.5	22.9

Swiss Franc Futures:

The Swiss Franc large speculator standing this week came in at a net position of -21,882 contracts in the data reported through Tuesday. This was a weekly advance of 2,730 contracts from the previous week which had a total of -24,612 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 56.5 percent. The commercials are Bearish with a score of 37.7 percent and the small traders (not shown in chart) are Bullish with a score of 70.2 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.

SWISS FRANC Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	13.1	62.9	20.9
– Percent of Open Interest Shorts:	45.7	28.0	23.3
– Net Position:	-21,882	23,439	-1,557
– Gross Longs:	8,822	42,236	14,057
– Gross Shorts:	30,704	18,797	15,614
– Long to Short Ratio:	0.3 to 1	2.2 to 1	0.9 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	56.5	37.7	70.2
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	41.2	-50.7	49.0

Canadian Dollar Futures:

The Canadian Dollar large speculator standing this week came in at a net position of -68,544 contracts in the data reported through Tuesday. This was a weekly rise of 41,458 contracts from the previous week which had a total of -110,002 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 Bullish with a score of 57.2 percent. The commercials are Bearish with a score of 41.7 percent and the small traders (not shown in chart) are Bullish with a score of 50.0 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.

CANADIAN DOLLAR Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	12.3	69.7	13.2
– Percent of Open Interest Shorts:	39.1	45.5	10.6
– Net Position:	-68,544	62,013	6,531
– Gross Longs:	31,460	178,469	33,726
– Gross Shorts:	100,004	116,456	27,195
– Long to Short Ratio:	0.3 to 1	1.5 to 1	1.2 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	57.2	41.7	50.0
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	41.7	-43.9	40.0

Australian Dollar Futures:

The Australian Dollar large speculator standing this week came in at a net position of -7,864 contracts in the data reported through Tuesday. This was a weekly boost of 11,295 contracts from the previous week which had a total of -19,159 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 84.0 percent. The commercials are Bearish-Extreme with a score of 14.5 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 94.2 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:	40.8	40.9	14.9
– Percent of Open Interest Shorts:	44.5	44.1	8.0
– Net Position:	-7,864	-6,812	14,676
– Gross Longs:	87,118	87,254	31,865
– Gross Shorts:	94,982	94,066	17,189
– Long to Short Ratio:	0.9 to 1	0.9 to 1	1.9 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	84.0	14.5	94.2
– Strength Index Reading (3 Year Range):	Bullish-Extreme	Bearish-Extreme	Bullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	0.8	-1.9	5.0

New Zealand Dollar Futures:

The New Zealand Dollar large speculator standing this week came in at a net position of -238 contracts in the data reported through Tuesday. This was a weekly gain of 8,078 contracts from the previous week which had a total of -8,316 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 40.4 percent. The commercials are Bullish with a score of 51.6 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 91.8 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.

NEW ZEALAND DOLLAR Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	39.7	47.8	9.6
– Percent of Open Interest Shorts:	40.1	51.2	5.9
– Net Position:	-238	-2,156	2,394
– Gross Longs:	25,235	30,379	6,120
– Gross Shorts:	25,473	32,535	3,726
– Long to Short Ratio:	1.0 to 1	0.9 to 1	1.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	40.4	51.6	91.8
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-9.1	2.1	50.4

Mexican Peso Futures:

The Mexican Peso large speculator standing this week came in at a net position of 30,479 contracts in the data reported through Tuesday. This was a weekly decrease of -241 contracts from the previous week which had a total of 30,720 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 46.4 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 0.0 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: Hold – Maintain Short Position.

MEXICAN PESO Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	36.9	57.5	2.0
– Percent of Open Interest Shorts:	19.1	73.7	3.7
– Net Position:	30,479	-27,678	-2,801
– Gross Longs:	63,103	98,278	3,503
– Gross Shorts:	32,624	125,956	6,304
– Long to Short Ratio:	1.9 to 1	0.8 to 1	0.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	46.4	55.7	0.0
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-19.1	20.7	-27.3

Brazilian Real Futures:

The Brazilian Real large speculator standing this week came in at a net position of -50,811 contracts in the data reported through Tuesday. This was a weekly gain of 2,152 contracts from the previous week which had a total of -52,963 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 3.9 percent. The commercials are Bullish-Extreme with a score of 83.7 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 100.0 percent.

Price Trend-Following Model: Downtrend

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

BRAZIL REAL Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	13.2	60.9	18.2
– Percent of Open Interest Shorts:	68.4	20.9	3.0
– Net Position:	-50,811	36,778	14,033
– Gross Longs:	12,179	56,038	16,766
– Gross Shorts:	62,990	19,260	2,733
– Long to Short Ratio:	0.2 to 1	2.9 to 1	6.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	3.9	83.7	100.0
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-8.4	-5.2	81.1

Bitcoin Futures:

The Bitcoin large speculator standing this week came in at a net position of 108 contracts in the data reported through Tuesday. This was a weekly increase of 274 contracts from the previous week which had a total of -166 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 68.0 percent. The commercials are Bullish with a score of 55.8 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 18.5 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.

BITCOIN Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	86.9	3.7	4.0
– Percent of Open Interest Shorts:	86.5	5.0	3.1
– Net Position:	108	-351	243
– Gross Longs:	23,349	998	1,067
– Gross Shorts:	23,241	1,349	824
– Long to Short Ratio:	1.0 to 1	0.7 to 1	1.3 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	68.0	55.8	18.5
– Strength Index Reading (3 Year Range):	Bullish	Bullish	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	11.6	-13.6	-5.4

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.

05 Sep

EUR/USD Maintains Neutral Stance Ahead of US Employment Data

By RoboForex Analytical Department

The EUR/USD pair remained stable around 1.1077 on Thursday morning, following steady growth in the previous session but still confined within a sideways channel. Investors are holding back and conserving their energy in anticipation of crucial employment data from the United States, which begins with today’s ADP private sector jobs report. Although the ADP report does not directly correlate with Friday’s highly anticipated Nonfarm Payroll (NFP) report, it provides a general sense of market sentiment.

Additionally, the market will closely watch today’s weekly unemployment claims data release, especially given the Federal Reserve’s focused attention on employment indicators. These releases are expected to heighten EUR/USD volatility as the day progresses.

The spotlight will soon shift to Friday’s key employment metrics, including non-farm payrolls, the unemployment rate, and average hourly earnings for August. These indicators are pivotal ahead of the September Fed meeting. Robust employment data may support a minimal 25 basis point rate cut by the Fed, whereas weaker labour market figures could heighten the possibility of a 50 basis point reduction.

EUR/USD Technical Analysis

The pair is currently consolidating around the 1.1065 level. The market may test up to 1.1107 today, which is seen as a correction phase in the context of a broader decline. Following this potential rise, a further decline to 1.1060 is anticipated. A break below this level could signal a continuation of the downtrend, potentially reaching 1.1016. The MACD indicator supports this bearish outlook, with its signal line below zero and pointing downwards.

On the H1 chart, EUR/USD continues to consolidate around 1.1065. A slight dip to 1.1056 might occur, followed by an extension towards 1.1107 as part of a corrective pattern. Once this correction phase is completed, the downward trend is expected to resume. The Stochastic oscillator, currently just above 20, suggests a potential rise to 80, indicating room for short-term upward movement before continuing thebroader bearish trend.

Disclaimer

Financial News Forex and Currency News

04 Sep

USDCAD: Tests resistance ahead of BoC decision

By ForexTime

USDCAD ended August ↓ 2.3%

BoC decision + US jobs report = volatility?

Traders fully priced in 25 bp cut by BoC this week

Bloomberg FX model: 74% – (1.3400 – 1.3675)

Key technical levels – 1.3550 & 1.3600

After tumbling over 2% in August, the USDCAD has kicked off the new month on a bullish note.

Prices jumped over 60 pips on Tuesday, testing key resistance at 1.3550 ahead of the Bank of Canada rate decision on Wednesday.

USDCAD

The USDCAD’s recent upside could be based around a weaker Canadian Dollar. It is worth noting that the CAD has slipped against most G10 currencies this week thanks to lower oil prices and expectations around a BoC rate cut.

Looking at the charts, prices remain under pressure on the weekly charts with the 100 and 50-week SMA acting as key levels of resistance.

USDCAD

Nevertheless, a significant move may be on the horizon and here are 3 reasons why…

1) Bank of Canada rate decision

On Wednesday, September 4th, the Bank of Canada (BoC) will announce its rate decision.

Weak economic data from Canada have boosted expectations around the BoC cutting interest rates for the third time this year.

Traders have fully priced in a 25-basis point BoC cut by September, another cut by October and one final cut by December!

Note: The latest jobs data from Canada will be published on Friday, September 6th. The unemployment rate is expected to tick higher to 6.5% from 6.4% in the previous month while net change in employment is seen rising to 26.5k after declining by 2.8k in June.

Should the BoC move ahead with a rate cut in September and signal further cuts down the road, this could push the USDCAD higher.

An outcome where the central bank sounds less dovish than expected could strengthen the Canadian Dollar, pulling the USDCAD lower as a result.

Golden nugget: Over the past year, the BoC rate decision has triggered upside moves as much as 0.35% of declines of 0.1% in a 6-hour window post-release.

2) Key US jobs report

As highlighted in our week ahead report, the major event this week is the US jobs data on Friday.

Given how investors may use this as a guide to how quick or slow the Fed will cut rates from September onwards, this data could rock global financial markets.

The US economy is expected to have created 165k new jobs in August with the unemployment rate ticking lower to 4.2% and average hourly earnings rising to 3.7% year-on-year compared to 3.6% in the previous month.

If the unemployment rate ticks lower to 4.2% and cools recession fears, this may end up boosting the USD – pushing the USDCAD higher.

A scenario where the unemployment rate remains at 4.3% or even higher could fuel recession fears – boosting bets of a 50 bp cut. Given how this is likely to weaken the USD, the USDCAD could end up tumbling.

Traders have fully priced in a 25-basis point Fed cut by September with a 34% probability of a 50 bp move.

Golden nugget: Over the past 12 months, the US jobs report has triggered upside moves as much as 0.4% of declines of 0.3% in a 6-hour window post-release.

3) Technical forces

USDCAD bulls could be handed more power if prices secure a solid daily close above 1.3550. Still, lagging indicators seem to be favour bears with prices still trading below the 50, 100 and 200-day SMA.

A solid breakout above 1.3550 may inspire an incline toward 1.3600 and 1.3677.

Should 1.3550 prove to be reliable resistance, this could see prices decline toward 1.3450 and 1.3400.

Bloomberg’s FX model points to a 75% chance that USDCAD will trade within the 1.3400 – 1.3675 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

Financial News Forex and Currency News

04 Sep

USD/JPY Sees Modest Rise Amid Anticipation of BoJ Policy Shift

By RoboForex Analytical Department

The USD/JPY pair has slightly increased, rising to 145.95 on Wednesday morning. This movement marks a rebound from two-week lows, though it is still early to suggest a significant reversal in the trend due to the ongoing economic climate.

Market participants are cautious as they await crucial US employment market data for August, which is due later this week. These figures will likely substantially impact the Federal Reserve’s forthcoming decisions.

On the Japanese front, the Bank of Japan (BoJ) has maintained its current policy stance but has signalled potential adjustments should economic projections align with actual outcomes. This cautious but responsive approach, including the possibility of a December interest rate hike, reflects the BoJ’s commitment to stability in the face of economic indicators.

Recent Japanese economic data has shown a slight improvement, with the manufacturing PMI inching up to 49.8 from 49.5, nearly reaching the critical threshold of 50.0 that differentiates contraction from expansion. This positive development suggests a potential stabilisation in the manufacturing sector, which could influence the USD/JPY forecast as market participants assess the implications for monetary policy and economic growth in Japan.

USD/JPY technical analysis

The H4 chart indicates a recent corrective move up to 147.20, followed by a downward wave targeting 144.11. Should this level be reached, a corrective movement to 145.66 could occur, testing it from below. A further decline to 144.11 is conceivable, with a potential continuation to 141.80 and down to 137.77. This bearish outlook is supported by the MACD indicator, with the signal line positioned above zero but trending downward sharply.

On the H1 chart, USD/JPY executed a downward impulse to 145.66 and has since been consolidating around this level. A break below the consolidation range could initiate the continuation of the downward trend towards 144.11. After reaching this target, a retest of 145.66 may be anticipated. This bearish scenario aligns with the Stochastic oscillator’s readings, where the signal line is just above 50 but indicates a downward movement.

Disclaimer

Financial News Forex and Currency News

31 Aug

Currency Speculators sharply boost Canadian Dollar and Euro bets

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 August 27th 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 Canadian Dollar & Euro

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

Leading the gains for the currency markets was the Canadian Dollar (54,408 contracts) with the EuroFX (36,821 contracts), the British Pound (22,420 contracts), the Australian Dollar (19,726 contracts), the New Zealand Dollar (5,453 contracts), the Japanese Yen (2,283 contracts), the Swiss Franc (1,102 contracts), the US Dollar Index (1,322 contracts) and Bitcoin (77 contracts) also showing positive weeks.

The only currencies seeing declines in speculator bets were the Mexican Peso (-3,926 contracts) and the Brazilian Real (-2,008 contracts) also registering lower bets on the week.

Speculators boost Canadian Dollar and Euro bets

Highlighting the COT currency’s data this week is the sharp paring of the bearish bets in the Canadian dollar and the pushing higher of the Euro position to the best level in over seven months. Both currencies are potentially benefiting from the speculator’s views the US dollar will weaken with the US Federal Reserve starting on an interest rate cutting cycle.

Large speculative Canadian dollar positions rose this week by the highest weekly amount on record with a huge jump by +54,408 contracts. This week’s record gain surpasses the previous record weekly increase of +36,590 contracts that took place on March 25th of 2014.

This was the fourth straight weekly increase in speculator bets and brings the current speculator standing to a total of -110,002 contracts. The speculator sentiment has now been in a continuous bearish position for fifty-six straight weeks and recently hit the most bearish level on record at a total of -196,263 contracts on July 30th. Since then, the position rebound has been strong and swift – taking a total of 86,251 net contracts off that bearish record level.

The CAD exchange rate has been on the rise as well with the CAD gaining for the past four consecutive weeks against the US dollar. Currently, the CAD is testing a multi-year down-trending line that started in May/June of 2021 versus the USD and is on pace for over a 2 percent gain over the month of August.

Meanwhile, the Euro bets got a boost by +36,821 contracts this week following last week’s +29,034 contract gain. Euro bets have risen in six out of the past eight weeks for a total eight-week increase of +102,357 contracts. The current speculator positioning is now at a total of +92,838 contracts – the most bullish position since January 16th and only nine weeks after the last bearish position (July 2nd).

The Euro exchange versus the US dollar had risen for three out of the past four weeks before declining this week by over 1 percent. The currency closed at 1.1059 on Friday and is currently trading right as it’s 200-week moving average. The Euro is on pace to increase by just under 2 percent in the month of August.

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 Japanese Yen & 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 Japanese Yen (100 percent) led the currency markets this week. The British Pound (77 percent), the Australian Dollar (74 percent), Bitcoin (64 percent) and the EuroFX (60 percent) came in as the next highest in the weekly strength scores.

On the downside, the Brazilian Real (2 percent) comes in at the lowest strength levels currently and is in Extreme-Bearish territory (below 20 percent). The next lowest strength scores are the New Zealand Dollar (25 percent) and the US Dollar Index (44 percent).

Strength Statistics:
US Dollar Index (44.4 percent) vs US Dollar Index previous week (41.5 percent)
EuroFX (59.9 percent) vs EuroFX previous week (44.2 percent)
British Pound Sterling (76.5 percent) vs British Pound Sterling previous week (66.4 percent)
Japanese Yen (100.0 percent) vs Japanese Yen previous week (98.9 percent)
Swiss Franc (50.3 percent) vs Swiss Franc previous week (48.1 percent)
Canadian Dollar (38.7 percent) vs Canadian Dollar previous week (14.3 percent)
Australian Dollar (74.5 percent) vs Australian Dollar previous week (57.9 percent)
New Zealand Dollar (24.9 percent) vs New Zealand Dollar previous week (14.4 percent)
Mexican Peso (46.5 percent) vs Mexican Peso previous week (48.5 percent)
Brazilian Real (1.8 percent) vs Brazilian Real previous week (3.7 percent)
Bitcoin (63.9 percent) vs Bitcoin previous week (62.7 percent)

Japanese Yen & Swiss Franc top the 6-Week Strength Trends

COT Strength Score Trends (or move index, calculates the 6-week changes in strength scores) showed that the Japanese Yen (84 percent) and the Swiss Franc (50 percent) lead the past six weeks trends for the currencies. The EuroFX (29 percent), the Canadian Dollar (10 percent) and Bitcoin (6 percent) are the next highest positive movers in the latest trends data.

The New Zealand Dollar (-40 percent) leads the downside trend scores currently with the Australian Dollar (-26 percent), British Pound (-19 percent) and the Mexican Peso (-15 percent) following next with lower trend scores.

Strength Trend Statistics:
US Dollar Index (0.8 percent) vs US Dollar Index previous week (2.9 percent)
EuroFX (29.0 percent) vs EuroFX previous week (22.3 percent)
British Pound Sterling (-19.3 percent) vs British Pound Sterling previous week (-7.7 percent)
Japanese Yen (84.2 percent) vs Japanese Yen previous week (97.9 percent)
Swiss Franc (50.3 percent) vs Swiss Franc previous week (40.7 percent)
Canadian Dollar (10.1 percent) vs Canadian Dollar previous week (-23.8 percent)
Australian Dollar (-25.5 percent) vs Australian Dollar previous week (-34.8 percent)
New Zealand Dollar (-40.1 percent) vs New Zealand Dollar previous week (-76.3 percent)
Mexican Peso (-15.2 percent) vs Mexican Peso previous week (-14.1 percent)
Brazilian Real (-8.0 percent) vs Brazilian Real previous week (-7.8 percent)
Bitcoin (6.2 percent) vs Bitcoin previous week (-1.9 percent)

Individual COT Forex Markets:

US Dollar Index Futures:

The US Dollar Index large speculator standing this week was a net position of 18,913 contracts in the data reported through Tuesday. This was a weekly increase of 1,322 contracts from the previous week which had a total of 17,591 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 44.4 percent. The commercials are Bullish with a score of 63.6 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 0.6 percent.

Price Trend-Following Model: Strong Downtrend

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

US DOLLAR INDEX Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	73.2	19.3	4.3
– Percent of Open Interest Shorts:	36.2	53.7	7.0
– Net Position:	18,913	-17,555	-1,358
– Gross Longs:	37,377	9,846	2,191
– Gross Shorts:	18,464	27,401	3,549
– Long to Short Ratio:	2.0 to 1	0.4 to 1	0.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	44.4	63.6	0.6
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	0.8	3.6	-23.1

Euro Currency Futures:

The Euro Currency large speculator standing this week was a net position of 92,838 contracts in the data reported through Tuesday. This was a weekly increase of 36,821 contracts from the previous week which had a total of 56,017 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 59.9 percent. The commercials are Bearish with a score of 38.5 percent and the small traders (not shown in chart) are Bullish with a score of 67.3 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.

EURO Currency Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	30.1	53.4	12.2
– Percent of Open Interest Shorts:	17.3	72.1	6.3
– Net Position:	92,838	-135,522	42,684
– Gross Longs:	218,381	388,226	88,749
– Gross Shorts:	125,543	523,748	46,065
– Long to Short Ratio:	1.7 to 1	0.7 to 1	1.9 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	59.9	38.5	67.3
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	29.0	-32.2	40.8

British Pound Sterling Futures:

The British Pound Sterling large speculator standing this week was a net position of 89,931 contracts in the data reported through Tuesday. This was a weekly boost of 22,420 contracts from the previous week which had a total of 67,511 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 76.5 percent. The commercials are Bearish-Extreme with a score of 19.5 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 94.4 percent.

Price Trend-Following Model: Strong Uptrend

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

BRITISH POUND Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	55.5	23.7	15.2
– Percent of Open Interest Shorts:	22.7	62.1	9.6
– Net Position:	89,931	-105,245	15,314
– Gross Longs:	152,163	65,042	41,570
– Gross Shorts:	62,232	170,287	26,256
– Long to Short Ratio:	2.4 to 1	0.4 to 1	1.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	76.5	19.5	94.4
– Strength Index Reading (3 Year Range):	Bullish	Bearish-Extreme	Bullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-19.3	17.5	-1.9

Japanese Yen Futures:

The Japanese Yen large speculator standing this week was a net position of 25,868 contracts in the data reported through Tuesday. This was a weekly advance of 2,283 contracts from the previous week which had a total of 23,585 net contracts.

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

JAPANESE YEN Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	26.5	59.7	12.2
– Percent of Open Interest Shorts:	18.4	69.6	10.5
– Net Position:	25,868	-31,450	5,582
– Gross Longs:	84,305	190,141	38,943
– Gross Shorts:	58,437	221,591	33,361
– Long to Short Ratio:	1.4 to 1	0.9 to 1	1.2 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	100.0	0.0	100.0
– Strength Index Reading (3 Year Range):	Bullish-Extreme	Bearish-Extreme	Bullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	84.2	-84.3	42.6

Swiss Franc Futures:

The Swiss Franc large speculator standing this week was a net position of -24,612 contracts in the data reported through Tuesday. This was a weekly rise of 1,102 contracts from the previous week which had a total of -25,714 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 50.3 percent. The commercials are Bearish with a score of 44.3 percent and the small traders (not shown in chart) are Bullish with a score of 64.3 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.

SWISS FRANC Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	14.4	65.7	18.1
– Percent of Open Interest Shorts:	50.1	25.8	22.2
– Net Position:	-24,612	27,446	-2,834
– Gross Longs:	9,873	45,169	12,417
– Gross Shorts:	34,485	17,723	15,251
– Long to Short Ratio:	0.3 to 1	2.5 to 1	0.8 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	50.3	44.3	64.3
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	50.3	-55.7	41.1

Canadian Dollar Futures:

The Canadian Dollar large speculator standing this week was a net position of -110,002 contracts in the data reported through Tuesday. This was a weekly increase of 54,408 contracts from the previous week which had a total of -164,410 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 38.7 percent. The commercials are Bullish with a score of 59.8 percent and the small traders (not shown in chart) are Bearish with a score of 42.2 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: New Buy – Long Position.

CANADIAN DOLLAR Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	6.5	77.3	10.8
– Percent of Open Interest Shorts:	43.7	41.4	9.5
– Net Position:	-110,002	106,144	3,858
– Gross Longs:	19,325	228,771	32,042
– Gross Shorts:	129,327	122,627	28,184
– Long to Short Ratio:	0.1 to 1	1.9 to 1	1.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	38.7	59.8	42.2
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	10.1	-12.9	26.4

Australian Dollar Futures:

The Australian Dollar large speculator standing this week was a net position of -19,159 contracts in the data reported through Tuesday. This was a weekly lift of 19,726 contracts from the previous week which had a total of -38,885 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 74.5 percent. The commercials are Bearish with a score of 24.1 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 86.7 percent.

Price Trend-Following Model: Strong Uptrend

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

AUSTRALIAN DOLLAR Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	39.8	42.8	15.4
– Percent of Open Interest Shorts:	49.1	39.3	9.5
– Net Position:	-19,159	7,222	11,937
– Gross Longs:	81,486	87,629	31,461
– Gross Shorts:	100,645	80,407	19,524
– Long to Short Ratio:	0.8 to 1	1.1 to 1	1.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	74.5	24.1	86.7
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-25.5	24.1	-13.3

New Zealand Dollar Futures:

The New Zealand Dollar large speculator standing this week was a net position of -8,316 contracts in the data reported through Tuesday. This was a weekly boost of 5,453 contracts from the previous week which had a total of -13,769 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 24.9 percent. The commercials are Bullish with a score of 69.6 percent and the small traders (not shown in chart) are Bullish with a score of 67.6 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.

NEW ZEALAND DOLLAR Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	31.7	58.3	7.6
– Percent of Open Interest Shorts:	44.5	46.5	6.6
– Net Position:	-8,316	7,659	657
– Gross Longs:	20,648	37,932	4,943
– Gross Shorts:	28,964	30,273	4,286
– Long to Short Ratio:	0.7 to 1	1.3 to 1	1.2 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	24.9	69.6	67.6
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-40.1	36.1	15.5

Mexican Peso Futures:

The Mexican Peso large speculator standing this week was a net position of 30,720 contracts in the data reported through Tuesday. This was a weekly reduction of -3,926 contracts from the previous week which had a total of 34,646 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 46.5 percent. The commercials are Bullish with a score of 54.9 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 2.2 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.

MEXICAN PESO Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	39.2	54.5	2.5
– Percent of Open Interest Shorts:	21.1	71.7	3.4
– Net Position:	30,720	-29,312	-1,408
– Gross Longs:	66,669	92,793	4,303
– Gross Shorts:	35,949	122,105	5,711
– Long to Short Ratio:	1.9 to 1	0.8 to 1	0.8 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	46.5	54.9	2.2
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-15.2	16.6	-24.8

Brazilian Real Futures:

The Brazilian Real large speculator standing this week was a net position of -52,963 contracts in the data reported through Tuesday. This was a weekly decline of -2,008 contracts from the previous week which had a total of -50,955 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 1.8 percent. The commercials are Bullish-Extreme with a score of 98.7 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.

BRAZIL REAL Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	14.8	76.7	3.2
– Percent of Open Interest Shorts:	74.8	16.8	3.1
– Net Position:	-52,963	52,841	122
– Gross Longs:	13,034	67,673	2,832
– Gross Shorts:	65,997	14,832	2,710
– Long to Short Ratio:	0.2 to 1	4.6 to 1	1.0 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	1.8	98.7	35.6
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-8.0	7.6	2.9

Bitcoin Futures:

The Bitcoin large speculator standing this week was a net position of -166 contracts in the data reported through Tuesday. This was a weekly increase of 77 contracts from the previous week which had a total of -243 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 63.9 percent. The commercials are Bullish with a score of 61.3 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 19.7 percent.

Price Trend-Following Model: Strong Downtrend

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

BITCOIN Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	84.2	3.6	4.4
– Percent of Open Interest Shorts:	84.8	4.1	3.4
– Net Position:	-166	-132	298
– Gross Longs:	25,105	1,083	1,308
– Gross Shorts:	25,271	1,215	1,010
– Long to Short Ratio:	1.0 to 1	0.9 to 1	1.3 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	63.9	61.3	19.7
– Strength Index Reading (3 Year Range):	Bullish	Bullish	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	6.2	-8.0	-2.3

Article By InvestMacro – Receive our weekly COT Newsletter

COT Updates Forex and Currency News Opinions

30 Aug

AUD/USD Poised for Potential Rise Amid RBA’s Cautious Stance

By RoboForex Analytical Department

The AUD/USD pair shows signs of potential resurgence as it trades near 0.6802, consolidating within a sideways range at its local peaks towards the end of August. The Australian dollar has appreciated by almost 4% over the month, bolstered by high consumer price index figures that underline persistent inflationary pressures in Australia.

In July, Australian inflation was recorded at 3.5% year-over-year, slightly decelerating from June’s figures but still surpassing expectations of 3.4%. This has supported the Reserve Bank of Australia’s (RBA) decision to maintain a tight monetary policy stance. Despite the challenges in effectively curbing high inflation, the RBA has adopted a watchful rather than aggressive approach, which could yield favourable outcomes over a longer horizon.

During the last RBA meeting, discussions were held regarding a potential rate hike, though it was ultimately decided to keep rates unchanged. The RBA’s cautious approach, combined with the earlier general weakness of the US dollar, has provided a solid backdrop for the Australian dollar’s strength.

AUD/USD technical analysis

On the H4 chart, AUD/USD recently completed an upward wave to 0.6822, followed by a downward impulse to 0.6784. Currently, a corrective movement to 0.6816 is anticipated, potentially establishing the upper limits of the consolidation range. A downward exit from this range could initiate a new decline to 0.6760. A break below this level might signal the start of a new downward trend towards 0.6640, with a potential continuation to 0.6575. The MACD indicator supports this bearish scenario, with its signal line at the highs and trending downward.

On the H1 chart, the pair is forming a correction to 0.6816. Following this correction, a downward movement to 0.6764 is expected, potentially extending to 0.6757. The Stochastic oscillator, currently above 80, indicates a likely decline to 20, supporting the possibility of continued downward momentum after the correction.

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29 Aug

EUR/USD Stabilises Ahead of Core PCE Inflation Report

By RoboForex Analytical Department

The EUR/USD pair is holding steady at around 1.1134 as markets consolidate USD positions during a lull in significant news. Investors are now keenly awaiting the release of the Core PCE inflation data, a critical metric that the Federal Reserve uses to gauge inflationary pressures and shape its interest rate policy.

The anticipation surrounding this week’s Core PCE release is particularly high due to the lack of impactful data from both the US and the eurozone earlier in the week. While significant shifts in expectations regarding the Fed’s monetary policy trajectory are unlikely, the upcoming report will still be crucial for fine-tuning investor forecasts.

The market has currently primarily priced in a rate cut by the Fed at its September meeting, with the baseline expectation being a 25 basis point reduction. However, a 34.5% probability of a more aggressive cut of 50 basis points remains. This possibility is bolstered by recent comments from Fed Chair Jerome Powell indicating that the timing for a rate adjustment is appropriate now, echoing sentiments within the monetary policy community.

EUR/USD technical analysis

On the H4 chart of EUR/USD, the pair is forming a structure indicating an initial decline towards 1.1090. Following this decline, a corrective movement to 1.1150 is anticipated. Once this correction concludes, a further decline to 1.1030 is expected, potentially continuing to 1.0960. This bearish outlook is supported by the MACD indicator, with its signal line positioned above zero but trending sharply downwards.

On the H1 chart, EUR/USD has already declined to 1.1104. A corrective phase towards 1.1150 may follow, testing it from below before resuming the downward trajectory towards 1.1090. The Stochastic oscillator, currently above 80, suggests an impending drop to 20, reinforcing the likelihood of continued downward movement.

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28 Aug

NZD/USD Reaches Annual High Amid USD Weakness

By RoboForex Analytical Department

The NZD/USD pair has climbed to the highest level since 15 January 2024, continuing its trajectory within an ascending channel towards a target of 0.6233. The New Zealand dollar’s growth is primarily fuelled by the weakening US dollar, mirroring trends observed with other currencies such as the AUD and CAD.

Investor sentiment is buoyed by the anticipation that the US Federal Reserve will begin easing monetary policy at its September meeting. Debates about whether the rate cut will be 25 or 50 basis points are ongoing. The decision is seen as imminent given the current inflationary environment in the US and the need to support the employment market.

Conversely, the Reserve Bank of New Zealand (RBNZ) has already taken proactive steps by lowering its interest rate earlier this month. The RBNZ has also signalled a potential reduction in lending costs by up to 75 basis points by year-end, marking a fairly aggressive stance on rates. This transparent approach to monetary policy is helping to shape market expectations and bolster the NZD.

Technical analysis of NZD/USD

On the H4 chart, NZD/USD has completed a growth wave to 0.6250 and is now forming the initial decline phase towards 0.6128. After reaching this target, a corrective movement to 0.6191 might occur, testing it from below before initiating a further decline to 0.6065 and possibly extending to 0.6000. The MACD indicator, positioned above zero but trending downwards, supports this bearish outlook.

On the H1 chart, the pair is currently developing a decline structure towards 0.6222. Following this, a brief uptick to 0.6238 is expected, potentially leading to a consolidation around this level. A downward exit from this consolidation could signal the continuation of the downward trend towards 0.6128. This scenario is corroborated by the Stochastic oscillator, with its signal line below 50 and aiming towards 20, indicating a likely continuation of the downward movement.

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26 Aug

Japanese Yen Gains as USD Weakens and BOJ Signals Possible Rate Hike

By RoboForex Analytical Department

The Japanese yen has shown a notable strengthening, with the USD/JPY pair dropping to 143.99 on Monday, marking a three-week low. This movement is primarily driven by the weakness of the US dollar and significant remarks from the Bank of Japan (BOJ) and the US Federal Reserve.

Market dynamics and Central Bank signals

The recent hawkish comments from Kazuo Ueda, the Governor of the Bank of Japan, have garnered significant attention. Last Friday, Ueda hinted that the BOJ might adjust its monetary policy if economic forecasts align with current trends. The market interpreted this statement as a potential precursor to an interest rate hike, especially in light of Japan’s core consumer price index rising for the third consecutive month to 2.7% in July, with overall inflation holding steady at 2.8%.

Conversely, Jerome Powell, Chair of the US Federal Reserve, adopted a more dovish stance, indicating that it might be time to revise US monetary policy due to increasing risks to the labour market. This suggests that the Fed could begin easing monetary policy as soon as September, a move that contrasts sharply with the potential tightening in Japan. These shifts in monetary policy outlooks have significantly shaped forex forecasts for the USD/JPY pair.

Technical analysis of USD/JPY

The USD/JPY formed a consolidation range around the 146.70 level before moving downward to 143.50. There may be a temporary rise to 144.55, but a further decline to 142.88 could follow. The MACD indicator supports this bearish outlook, with its signal line below zero and trending downward.

The pair has completed a downward structure to 143.44. A corrective move towards 144.55 is possible, potentially extending to 145.70 as a test from below. Following this, a decline to 142.88 might occur. The Stochastic oscillator, currently above 50, suggests a rise to 80 before the next downward phase.

Summary

The USD/JPY pair is experiencing downward pressure due to a combination of USD weakness and potential monetary policy adjustments from the BOJ. As market dynamics evolve with central bank policies and economic indicators, the yen could see further gains if the BOJ shifts towards a tighter monetary stance in response to rising inflation.

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