Commitment of Traders Report

Friday’s Commitment of Traders report showed:

·        Investors went increasingly short JPY. JPY shorts are now at an extreme level. That may make it more difficult for USD/JPY to rally further.

·         EUR shorts increased slightly. EUR shorts are approaching extreme levels, but aren’t there yet so positioning should not be a barrier to further declines in EUR/USD.

·         Investors cut their GBP longs. They’re now slightly short. This may take some pressure off of GBP. However, overall the positions are neutral (right in the middle of the five-year range) so they could go either way. While the percentage change last week was quite dramatic, that’s only because the net position is very small. The absolute value of the change was not great.

·         Investors cut their longs in CAD and AUD, but added to longs in NZD.  Again, the percentage change distorts the size of the move; the actual changes weren’t that great. Positioning is still not an obstacle to further declines in these currencies.