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Euro Bulls Persist, US Dollar Net Shorts Largest Since May 2018 – COT Report

US Dollar, EUR/USD, GBP/USD, COT Report –Analysis

  • Euro Net Longs Surge on Short Squeeze
  • US Dollar Shorts Largest Since May 2018
  • Speculators Follow Risk Sentiment as AUD Shorts are Unwound

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Euro Bulls Persist, US Dollar Net Shorts Largest Since May 2018 - COT Report

Source: CFTC, DailyFX (Covers up to June 9th, released June 12th)

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Euro Bulls Persist, US Dollar Net Shorts Largest Since May 2018 – COT Report

In the week to June 16th, investors raised their short exposure in the US Dollar to its largest since May 2018 after a $6.789bln increase in net shorts against G10 currencies. While speculators appear to be positioning themselves for a reflationary environment, increased concerns of a second wave could see USD shorts begin to unwind.

The bulk of the USD selling had been against the Euro, which saw net longs rise $2.9bln, taking overall bullish bets to $16.5bln. This had largely been attributed to the near 19k lot reduction in outrights shorts. EU fiscal integration has played a large part in the Euro positive story, as such, focus will be on getting the frugal four onside (Netherlands, Austria, Denmark, and Sweden) to agree on the recovery fund proposal throughout the Summer.

The other major positioning change had been observed in the Australian Dollar with a $2bln pullback in net shorts, which in turn saw bearish positions fall to its lowest level since May 2018. Much like the Euro, this had been predominantly led by a short squeeze amid the notable recovery across risk sentiment.

Bearish sentiment for the Pound eased up with net shorts falling by 1/3 to $1.257bln, however, as Brexit risk premium is likely to persist throughout the Summer and Autumn, risks remain skewed to further weakness.

Euro Bulls Persist, US Dollar Net Shorts Largest Since May 2018 - COT Report

US Dollar |

Euro Bulls Persist, US Dollar Net Shorts Largest Since May 2018 - COT Report

EUR/USD |

Euro Bulls Persist, US Dollar Net Shorts Largest Since May 2018 - COT ReportEuro Bulls Persist, US Dollar Net Shorts Largest Since May 2018 - COT Report

GBP/USD |

Euro Bulls Persist, US Dollar Net Shorts Largest Since May 2018 - COT ReportEuro Bulls Persist, US Dollar Net Shorts Largest Since May 2018 - COT Report

USD/JPY |

Euro Bulls Persist, US Dollar Net Shorts Largest Since May 2018 - COT ReportEuro Bulls Persist, US Dollar Net Shorts Largest Since May 2018 - COT Report

USD/CHF |

Euro Bulls Persist, US Dollar Net Shorts Largest Since May 2018 - COT ReportEuro Bulls Persist, US Dollar Net Shorts Largest Since May 2018 - COT Report

USD/CAD |

Euro Bulls Persist, US Dollar Net Shorts Largest Since May 2018 - COT ReportEuro Bulls Persist, US Dollar Net Shorts Largest Since May 2018 - COT Report

AUD/USD |

Euro Bulls Persist, US Dollar Net Shorts Largest Since May 2018 - COT ReportEuro Bulls Persist, US Dollar Net Shorts Largest Since May 2018 - COT Report

NZD/USD |

Euro Bulls Persist, US Dollar Net Shorts Largest Since May 2018 - COT ReportEuro Bulls Persist, US Dollar Net Shorts Largest Since May 2018 - COT Report

For a more in-depth analysis on FX, check out the FX Forecast

— Written by Justin McQueen, Market Analyst

Follow Justin on Twitter @JMcQueenFX