Key thoughts
Australian Dollar (AUDUSD) - the market is still mega short the Aussie with this week's number of 72,573 a new all time record. This makes sense of course given the AUD has been selling off for a few months now with no major reversal. A move back above 0.9035 might see some reversal but wholesale liquidation would likely only occur above 0.9330
Euro (EURUSD) - the Euro had a big week last week breaking up then down then rallying strongly into week's end. The big fall in shorts from 27,900 to a more conservative -8,504 which is a below average level of shorts over both the last 6 and 12 months reflects the Euro's early strength. Positions have now been rebuilt for fresh Euro shorts should the single currency break down further from last weeks lows or up through 1.3350.
Japanese Yen (USDJPY) - Yen shorts of 82,135 are in the second quartile of positions over the past 6 months and 17,000 below the recent high above 99,000. The Yen is in a big old range so a break of 97.50 is needed to really challenge the Bears.
British Pound (GBPUSD) - I reckon I have a good handle on what drives spec trading and how this translates back to CFTC positioning. Years or watching and doing have given me a fairly solid picture but I confess to being challenged by GBP positioning over the past few months and the moves in GBP. It looks like the trading parameters might have been widened to take account of the range.
Anyway positioning is still very short with 49,463 net contracts short at present.
New Zealand Dollar (NZDUSD) - Kiwi shorts have reduced to net 520 from 1846 short last week. I would expect these to build in the days and week's ahead and get very large if 0.7750 breaks.
Canadian Dollar (USDCAD) - Rangey trade equals net short but only in the third quartile of positioning at present. Spec's have bigger fish to fry it seems.
Copy my trading at FXCopy GregMcKenna
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