Analysis

CAD Shorts Reduce, USD Bulls Exit, GBP Outlook Stays Weak – COT Report

IC Markets IC Markets

COT Report: Evaluation and Speaking Factors

CAD Shorts Reduce by $1.7bln USD Bulls Proceed to Head for the Exit GBP Outlook Stays Delicate

The Predictive Energy of the CoT Report

Supply: CFTC, DailyFX (Covers as much as June 25th, launched June 28th)

CAD Shorts Reduce, USD Bulls Exit, GBP Sentiment Stays Weak – COT Replace

Exiting of USD longs continued, albeit materially lower than the prior week with bullish positioning easing by $890mln. Elsewhere, with Canadian knowledge persevering with to outperform relative to main counterparts and with oil costs again on the rise, general internet CAD shorts have seen a big discount of $1.7bln as speculators minimize gross shorts by 18ok contracts and added gross longs by 5k contracts.

Japanese Yen internet shorts have been roughly pared with speculators but once more slicing again on gross shorts, whereas contemporary longs have been added. Continuously, shorts now outnumber longs by 1.three:1 from three.17:1 two weeks in the past.

GBP shorts now on the highest since January 18th as speculators improve their bearish sentiment on the forex, as political uncertainty continues to weigh, whereas weak UK knowledge has additionally added to the softening backdrop. The Euro stays the biggest shorted forex towards the buck as traders barely paired again their gross longs leading to a $667mln improve in internet Euro shorts.

IG CLIENT SENTIMENT (RETAIL POSITIONING):

Data exhibits 54.1% of merchants are net-long with the ratio of merchants lengthy to quick at 1.18 to 1. The variety of merchants net-long is zero.7% decrease than yesterday and 20.2% decrease from final week, whereas the variety of merchants net-short is 15.1% decrease than yesterday and 87.zero% increased from final week.

We typically take a contrarian view to crowd sentiment, and the very fact merchants are net-long suggests NZDUSD costs could proceed to fall. Merchants are additional net-long than yesterday and final week, and the mixture of present sentiment and up to date modifications offers us a stronger NZDUSD-bearish contrarian buying and selling bias.

US Greenback

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EURUSD

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GBPUSD

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USDJPY

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USDCHF

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USDCAD

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AUDUSD

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NZDUSD

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KEY TRADING RESOURCES:

— Written by Justin McQueen, Market Analyst

To contact Justin, e mail him at Justin.mcqueen@ig.com

Observe Justin on Twitter @JMcQueenFX

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