Forex positioning and data in the futures market for the close of trading on Tuesday, September 20, 2016
The following are the net speculative positions in the major currencies as of the close of business on Tuesday, September 20,2016.
- EUR 85K short versus 81K short last week. Shorts increased by 4K.
- GBP 59K short versus 83K short last week. Shorts cut by 24K.
- JPY 59K long versus 57K long last week. Longs increased by 2K.
- CHF 8.4K long versus 1.3 K long last week. Longs increased by 7.1K.
- CAD 16K long versus 17K long last week. A cut of longs by 1K.
- AUD 7K long versus 36K long last week. Longs cut by 29K
- NZD -8K short versus 5 K long last week. Position switched from net long to net short (change of -13K on the week)
There were some fairly big changed in net positions in the current week. The big changes were in the GBP and the AUD. The GBP short position was cut by 24K between September 13 and September 20. During that time, the price of the GBPUSD moved to a low near 1.2950. So positions may have been pared and profits taken. There still is a net short position of 59K.
As for the AUD, the long position of 36K was nearly squared up (long only 7K now). Over that time period the price of the AUDUSD did rise, but it moved even higher over into Thursday's trade (we are a bit lower today).
The weekly commitment of traders report outlines the speculative positions for each currency as of the close of business on Tuesday of the reporting week. As such, it is a snapshot of the past, not the present.
Traders like to use the net speculative positions to gauge interest, or perhaps even oversold or overbought market conditions. For example if the positions are at a record short, the speculators are confident about the position. However. given a catalyst that might lead to the currency moving in the opposite direction of the position, the momentum could lead to a snap back move on the back of covering.
