FXStreet (Bali) - As the FX Team at TD Securities reports, IMM data for the week through July 29th showed a much more robust, bullish view on the USD emerging among spec/ CTA-type accounts.

Key Quotes

In aggregate, speculative accounts have amassed a net long USD position equivalent to USD16.0bn over the past week, up from the aggregated net long of USD9.8bn posted in the week through July 22nd. This is the biggest bull bet on the USD overall since February.

Investors went more aggressively short EUR this week. The net short position reached –108k contracts in the latest data, up from –88k contracts in the prior week. Net short positioning pushed beyond the 100k to contract mark for the first time since September 2012—when the market was in full short-covering mode after Mr. Draghi’s “do everything” promise to support the EUR a few weeks before. Recall that market positioning peaked at a net short of –214k contracts in June 2012 so while this week’s data represents a big step up in market positioning, we are not yet at a point where positioning looks extreme. Net GBP longs were trimmed slightly to +24.9k from +27.5k in the July 22nd week.

Net short JPY positioning increased sharply in the week also. Speculators are running a net short of –73k contracts currently, up from –53.9k in the prior week, a relatively large shift against the JPY. Interestingly, investors also sold the CHF more aggressively on net; while the position of –11k contracts is still small, this is the largest bet against the CHF in a year.

Investors appeared to like risk in the form of exposure to the commodity currencies over the past week—something we have suspected (and still do) that they will regret. The bump up in net long CAD positioning to +22.7k contracts (from +20.6k last week) is a little baffling as the CAD was trading weakly Tuesday and, to some extent, the writing for long CAD positions should have been on the wall (as it crossed the 200-day MA). Perhaps the net position was even larger and had already been cut back by the COB. Still, positioning suggests more long liquidation is a risk for the CAD as well as the AUD (+39.6k contracts, from +38.7k) and NZD (+15.3k from +15.1k).