Originally published by AxiTrader
Despite the high volatility seen in the FX market in the past week, there were no large shifts in speculative positioning. The latest report from the CFTC shows that speculators continue to believe in the euro: Net positioning stands at 141k long vs. 149k in the previous week. The currency extended losses later in the week, which likely forced some euro bulls to capitulate. Nevertheless, there are no signs of panic (yet).
Pound long positioning decreased slightly - from 32k to 28k. Hawkish comments from the BoE failed to boost the pound amid on-going Brexit concerns and broad dollar strength. The decline below 1.39 support on Friday likely led to some further position covering from pound bulls.
The yen bears are showing great resilience. The Japanese yen has caught a bid amid the risk-off sentiment in global markets, but that does not seem to be a concern to yen shorts. Net positioning remained almost unchanged at 113k. Given the large interest rate divergences between the United States and Japan, this makes sense. However, a further sell-off in the stock market would likely trigger a fresh wave of yen buying.
Meanwhile, speculators slightly increased their exposure to the commodity currencies. Australian dollar long positioning jumped from 13k to 14k, while Canadian dollar positioning now stands at 40k long (vs. 33k in the previous week). Looking at the recent price action, this is rather surprising. The outlook for the commodity currencies does look rather gloomy - especially for the Canadian dollar now that oil prices are coming once again under pressure.
