By CountingPips.com
The U.S. dollar continued its rise versus the euro this week in the forex markets while futures bets against the euro climbed to a record high level. The U.S. dollar rose by approximately 46 pips against the euro for the week as the Greek debt crisis and the uncertainty surrounding a potential bailout helped keep the European common currency on it’s downward trajectory. The week ending on February 12th marked the euro’s fifth straight week of decline against the
Futures bets against the euro climbed to a record high as of February 9th, according to the Commitments of Traders (COT) data released on Friday by the Chicago Mercantile Exchange. Non-commercial futures positions, those taken by hedge funds and large speculators, were net short the euro against the U.S. dollar by 57,152 contracts after being net short the euro by 43,741 contracts the week before. Net short euro positions have now increased for four consecutive weeks.
The COT report is published every Friday by the Chicago Mercantile Exchange and shows futures positions as of the previous Tuesday. It is a useful tool for traders to gauge investor sentiment and to look for potential changes in direction of a currency or commodity.
The U.S. dollar had a mixed week versus the other major currencies in forex trading, breaking its recent weekly trends. The USD rose versus the Japanese yen and Swiss franc while falling against the British pound, Canadian dollar, Australian dollar and New Zealand dollar, according to currency data from Oanda. The American currency had increased against the British pound, Canadian dollar and the New Zealand
The largest gain for the dollar this week was against the Japanese yen with a 69 pip increase followed by the 46 pip advance versus the euro (see chart). The dollar declined by over 200 pips against the Canadian dollar and by almost 200 pips versus the Australian dollar.
Next week will be a short week in the forex markets as many countries have holidays. There is the President’s day holiday in the U.S. on Monday, the Family Day holiday in Canada on Monday and the Swiss markets will be closed all week for Carnival. The Lunar New Year will close markets in South Korea, Hong Kong, Singapore, Malaysia, Taiwan, China and Vietnam on Monday with some of these markets staying closed for the week.
Retail Sales data out of the U.K. and Canada will be released while Japan’s interest rate decision and Gross Domestic Product report are also scheduled this week. The U.S. will see economic releases of Empire State manufacturing data, leading indicators, long-term TIC flows, housing starts/building permits and the Federal Open Market Committee’s meeting minutes.
EUR/USD Daily Chart – The EUR/USD currency pair dropped to the 1.3531 exchange rate level on Friday for the first time since May 19th of 2009, only a few months after reaching a 2009 high on November 25th at the 1.5143 level. This pair started its decline in early December and fell below the 200-day simple moving average (in red) on January 19th.
