US Greenback Sentiment Weakens, EUR Longs Decide Up, CAD Consolidates

US Greenback, GBP/USD, EUR/USD, COT Report –Analysis

• US Greenback Shorts at a 3-Month Excessive
• Euro Longs Choosing Up
• CAD Consolidates as Longs Look Stretched

US Greenback Sentiment Weakens, EUR Longs Decide Up, CAD Consolidates – COT Report

Within the remaining week of Could, speculators had as soon as once more elevated their bearish publicity within the US Greenback with internet shorts rising to a 3-month excessive, totalling $17.8bln. Whereas sentiment within the buck has deteriorated, main USD pairs proceed to commerce in slender ranges throughout this low vol interval. Final week’s NFP figures bolstered the case that the Federal Reserve has just a little extra respiratory room earlier than they’ve to debate tapering asset purchases. That mentioned, the key focus for USD merchants would be the US CPI report.

The Euro noticed one other modest rise in internet longs ($815mln). Though, as I’ve famous beforehand, topside resistance at 1.2245 stays a stumbling block for the forex with failure to interrupt above placing strain again on the 1.21 deal with. Elsewhere, with the ECB anticipated to keep up PEPP purchases at a major tempo for Q3, this might hold EUR/USD capped.

GBP internet longs skilled a decent-sized pullback of $580mln (-4.4% OI) as outright shorts rose to a 4-month excessive. Within the close to time period, uncertainty stays over the UK resolution as as to if a full reopening of the economic system will happen on June 21st. Nevertheless, whereas this is able to doubtless see a shift in sentiment, the brief time period ramifications for the UK economic system is proscribed. On the technical facet, the psychological 1.42 deal with continues to cap rallies, though, regardless of this, the pattern stays greater with GBP above 1.40.

Throughout the commodity currencies, promoting the Kiwi had largely been concentrated within the quick cash neighborhood. Elsewhere, internet longs within the Canadian Greenback grew ever so barely and thus stays the most important lengthy within the G10 advanced. Whereas there are causes to be bullish CAD, given the scale of the positive factors in current months, the forex seems to be settling in for a interval of consolidation above the 1.20 deal with.

Secure haven currencies have been in demand with JPY internet longs lower by 350mln, whereas CHF flipped internet lengthy once more. Nevertheless, whereas the Japanese Yen continues to trace Treasury yields, I stay bearish on the Swiss Franc, significantly as SNB officers spotlight their need for a weaker forex.

Weekly FX Positioning

Supply: CFTC, DailyFX (Covers as much as June 1st, launched June 4th)

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US Greenback Positioning

Supply: Refinitiv, DailyFX

EUR/USD Positioning

GBP/USD Positioning

Supply: Refinitiv, DailyFX

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