The speculative market is still very long in the EUR, but has trimmed the position in the latest week of CFTC data, in what could be a sign of what’s to come.
Net speculative long positions in the EUR witnessed a significant decline, dropping to 173,736 contracts compared to 187,089 in the previous week. As investors appeared to cut their bullish bets, this turnaround suggests that some caution may seep into market sentiment regarding the euro’s performance.
The Japanese Yen saw a significant rise in short positions, reaching 80,660, which was a significant increase from 64,791 previously. This indicates a growing bearish outlook among JPY traders. Similarly, the Aussie saw short positions drop to 49,081, a slight relief from the previous week’s 54,594.
In contrast, the long position of the British pound decreased marginally from 12593 to 11589.
The Swiss Franc saw its short position halved to 903 from the previous week’s level of 1,859, indicating a possible shift in traders’ sentiment towards a less bearish outlook.
In the week’s net data, I would expect to see more signs of USD buying as the dollar strengthens, inflation picks up and the debt ceiling fiasco comes to a close. Given the size of the euro’s net position, it is particularly weak.