Heys guys!
Hereās what COT looks like as of last tuesday.
I quickly went through some of the posts and saw some of you were well Peter already having a discussion on turn arounds in net positions on some currencies. So let get to itā¦
The commdolls
AUD, NZD and CAD
Non commercials: Specs have been selling AUD for the 3rd consecutive week as we see them reduce their net positive position and longs on AUD. Last weeks drop was however quite large specs reducing their net positive from 41229 to 22140. AUD has plunged to 0.9148 from 0.9281 against USD. Specs outlook on AUD seems bearish.
Specs have been selling NZD for the 8th consecutive week as they progressively reduce their net positions /longs/ and longs for the 7th consecutive week. We saw quite large change in net position last tuesday specs reducing their net position /longs/ from 9522 to 1120. NZD have plunged from 0.8302 to 0.8217 against the dollar last week. 4 year low net negative reading was at -5530. Is there a room for kiwi dollar to plunge further down at least against the dollar , I would say sure yes. Specs outlook on NZD is bearish.
Specs have reduced their net position /longs/ from 11630 to 7544 on CAD. Just the week prior last week we saw specs adding up on their net position /longs/ and they appeared somewhat bullish on CAD. Not anymore. At least against the dollar. Specs appear rather bearish to neutral on CAD. CAD jumped to 1.1028 from 1.0949 against the dollar last week.
Commercials: Commercials have been on the other hand reducing their net positions /shorts/ on AUD for the 2nd consecutive week. Rather bullish reading. However I want to highlight that it still is net negative and weāre yet to see a transition from negative to positive reading as we have with some currencies that we will later see.
Commercial net position on NZD has turned from net negative /-9702/ to net positive /39/. Commercials have started buying kiwi dollar. As I recall commercials buy when price is down and sell when its high and move the opposite to specs or the trend.
Commercials net position has turned from net negative to positive on CAD. Commercials have started buying CAD the week prior last tuesday commercials net position on CAD was -6359 and last tuesday we saw them turning it all around and now net position stands at 3203. Rather bullish reading.
The majors
GBP and EUR
Non commercials: Specs net position has turned to net positive from net negative on GBP. As of 9th Sep specs net position /longs/ was at 26727 and last week it plunged down to and into the negative zone at -6581. Most of it I suspect was due to Scotland referendum. Spec bulls were pricing in on or just seconds after the no vote came out, we saw pound sterling rising up across the board before giving it all away. So Iām not reading much into this change from net positive to net negative reading. However I do think we canāt be too optimistic on pound sterling neither as general election is coming up in May 2015 and there was slight slowdown in key economic data that was released recently. Scotland referendum may not be the end. And thereās a genuine uncertainty in that regards, politically speaking. That might deter investors away from investing in the UK - decline in pound sterling. And BoE may not start hiking rates until after next general election.
Specs have reduced their net position /shorts/ from -157505 to -137149 on EUR. While they reduced their net negative positions specs still appear very much bearish on EUR. EUR has plunged to 1.2908 from 1.2996 against dollar. Like I said Iāll be bearish on EUR until key economic indicators pick up.
Commercials: Commercials GBP net position has turned from negative /-17678/ to positive /15775/ reading. Commercials have started buying pound sterling. Probably a bargain price to get in pound sterling plunged to 1.6153 from 1.6329. Does it mean that weāll see pound sterling plunge further down ? probably it will against the dollar.
EUR net position /longs/ has declined once again for the 2nd consecutive week. Commercials have been selling EUR.
Safe havens
CHF, JPY
Non commercials: Specs have been reducing their net position /shorts/ for the 3rd consecutive week on Yen. Yen rose to 106.68 from 105.515 against dollar. While it may seem like a rather bullish reading. Fundamentally speaking japan is in a decade long deflationary cycle. Weāve been seeing yen decline against everyone across the board lately, is weakening much against dollar. While the policy makers are in for a weak yen to boost export and the economy things are not the same anymore as it was back in the 80s or 90s. Now much of the japanese manufacturers have moved their facilities outside of Japan, they all produce and purchase locally. There isnāt much manufacturing and producing happening in Japan anymore. Weak yen to boost exports ? And thereās another tax hike coming up soon however with stimulus this time around. I doubt that extra stimulus will do much. Weāll have to see on that one if japanese economy can swallow another major contraction due to another tax hike. I am still am very much bearish on Yen.
Specs have reduced their net position /shorts/ on CHF once again and they have been for the 7th consecutive week with some minor fluctuations in between but nothing too major.
Commercials: Commercials have been reducing their net position /longs/ for the 2nd consecutive week. They have been selling some of their yen longs. We saw commercial selling some of their CHF longs as we saw them recuce their net position /longs/ and longs.
Conclusion
AUD - bearish
NZD - bearish
CAD - neutral
GBP - neutral
EUR - bearish
JPY - bearish
CHF - bearish to neutral