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Forex pairs in this Article » EUR/USD, GBP/USD, USD/JPY
FXStreet (Barcelona) - Goncalo Moreira CMT, FXStreet Technical Analyst has taken a look at last weeks COT report and notes that speculators accelerated their net-short position reduction in the Japanese yen.

Key Quotes

“The sixth consecutive week narrowing in the yen net-short position is driven by short covering, as we can deduce from the reduction in the open interest. Measuring yen's net position relative to its past, there is an ongoing recovering from oversold levels accompanied by a gentle shrinking of the net exposure in the Nikkei (see above image). This situation translates into more USD selling against the JPY.”

“Increases in the speculator's net-long exposure are seen in the Sterling and Euro, opposite to the reduction in the dollar index contract which saw an higher increase in the short contracts then on the longs (see above chart). Small speculators are heavily net-short Euro and net-long Sterling. Open interest climbed to 218k (futures only).”

“In the Australian and New Zealand dollars, both commercials and non-commercials pared their long and short exposures and the net positions, which are still net-short for the first and net-long for the second, are not altered from the week before. Also on the back of risk aversion, the Canadian dollar saw the non-commercials and small specs attenuate the net-short exposure from 70k to 62k contracts.”

“This is a climate of whipsaws and failing support and resistance zones, when rightfully nervous investors have to adapt to new rules and let go of expectations and common sense.”
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