SENTIMENT TURNS BEARISH FOR THE AUSSIE
COT data doesn’t tell you much simply looking at weekly numbers. Charting COT with the currency pair is useful to view the interaction between both and to get an impression of trend. Take a look at my terminal screenshot attached to this posting. This chart plots both COT (black) as well as AUDUSD (orange)
Note that that Net is now slightly below zero signalling that speculators have turned net short…albeit by just a tad.
Speculators turned net short once again shows CFTC data earlier today. The following chart paints a clear picture showing what I would describe as the biggest short squeeze of all time. While sentiment remainednet negative for the Aussie during 2010 and throughout the majority of 2011, audusd continued its slow and painful gains.
In August, positioning breached the flat line but retreated the following week for a dip. September saw a surge in Aussie long interest which peaked in October and has since declined. Today’s data shows that once again speculators are net short.
HappyTradersFx