New Record for Speculative Euro Longs

Latest CFTC Release Dated April 17th , 2007:

The charts used to interpret the Commitment of Traders data now include both net positioning and the percentile indicator. The percentile indicator value is the current net positioning as a percentile when measured against the last 52 weeks. A reading above 90 indicates extreme bullishness and a reading below 0 extreme bearishness. Market turns occur at extreme levels of optimism and pessimism (bottoms at pessimism and tops at optimism). Therefore, readings close to 100% and 0% indicate increased potential for a top / bottom. Speculative interest (this week’s percentile reading adjusted in order to fit between -100% and 100%) is plotted below for each currency.

US Dollar Index: Implied net short dollar positioning increased for the second week in a row last week. The larger trend remains towards dollar weakness as implied positioning remains well below its 12 week moving average. However, the percentile indicator and implied short positioning is close to levels where the USD index has formed significant bottoms.

EUR: Euro net longs increased last week to a new record. The old record of 104,394 (previous week) at the beginning of March was broken as net longs are now at 106,770. The percentile indicator is at 98%, indicating extreme bullish sentiment and the possibility of a top and reversal.

GBP: Net positioning increased from 48,417 to 59,667 last week as speculators piled on longs ahead of the 2.0000 figure. The trend is towards Cable strength as positioning is above its 12 week average and the percentile indicator is above 50.

CHF: CHF net speculative positioning improved slightly for the second week in a row following the large increase in net shorts 3 weeks ago. Recently, speculators have sold CHF in droves and buy back shorts slowly, suggesting that the larger trend is towards CHF weakness (USDCHF strength).

JPY: Net short positions increased last week for the third week in a row as speculators have returned to selling JPY. The percentile indicator is below 50, indicating that the JPY may continues to weaken.

CAD: CAD positioning has improved from record short levels reached in early January. Net positioning has increased from -84,906 to -15,991 in that time. It looks as if traders will flip to the long side in the next week or two, which would be CAD bullish. Positioning remains above the 12 week average, which is also CAD bullish.

AUD: Net long positions increased slightly following the first drop in long positions in 5 weeks the week before, suggesting that the Aussie run may be near an end. With longs still near record levels, the risk of a reversal is high.