Speculators Continue to Cover USD Short Position

[CashBackForex]

CFTC Commitments of Traders (COT) Report, published 15 February 2013 - Technical Analysis. There was about a 58K contract reduction in the combined net short position in the USD. The biggest reduction was in the Australian Dollar where the reduction was almost 40K contracts. Specs remain long the A$ but they have reduced their short position to 57.5K, down from 118.9 just four weeks ago.

The combined net short position in the USD is 31.7K contracts. Last week, the combined USD short was 90.2K, and this was down from 200.4, four weeks ago.

There has been buying in the USD versus sales of the pound. Total spec British pound shorts are now approaching 30K.

In the euro, the specs are now long the euro and short the USD. They are also long the SF and short the USD. Combining the euro and SF positions the short USD position is about 50K versus the two.

• US Dollar Index: The OI declined by almost 9K in a market where the total OI is only 47K. The reduction came from the large spec who reduced both his longs and shorts. Small specs cannot make up their mine what side of the market to be flipped their position again this week, back to the long side of the DI.
  
  
• Euro (EUR/USD): The two biggest changes in the euro this period were reducing of short positions by the small spec shorts, and option activity. Again this week, the small specs flipped their position, largely by reducing their short positions by 12.6K. There was also a big reduction in the spreading category, down 14.1K, which included options. Both spec groups remain long the euro by about 31K contracts.
  
  
• British Pound Sterling (GBP/USD): The large specs followed last week's lead by the small specs and flipped to the short side of the pound. The total number of spec shorts in the pound it now up to almost 30K. Considering the long sell off in the pound the size of the short position is quite small.
  
  
• Japanese Yen (JPY/USD): The yen spec remain bearish, both by a better than 2 to 1 ratio, although they did reduce their short by 2.3K. They remain short 99.3K contracts as few were frightened by the G 20 talk about the currency wars. Expiration of the Feb contract did reduce the option trade by 11.6K, but spreading (options) still represents a large percentage 13.9 of the total market. The yen OI at 277K is only 10K less than the OI in the euro.
  
  
• Swiss Franc (CHF/USD): Small specs have a very big commitment to the long side of the SF. They are long by a 2.7 ratio and own a total of 52.7% of the market. The SF is not a big market but traditionally the small spec is a busy active trader in this market.
  
  
• Canadian Dollar (CAD/USD): Trading in the C$ seems somewhat subdued with reduced trade. Large specs remain a little better than a 3-to-1 long, but the net size of the position has grown smaller. Small specs are also long but by only 6.2K.
  
  
• New Zealand Dollar (NZD/USD): The Kiwi is very popular with the speculators. The small specs are a mere 2.5-to-1 long, but the large specs remain a 7-to1 long. Commodity currencies remain popular with the speculative crowd.
  
  
• Australian Dollar (AUD/USD): The spec long liquidation in the A$ was significant during the period, almost 40K contracts. Despite the heavy A$ selling, the large spec still remains better than a 2 ratio long. The total spec long is still large, 57.5K, but this is down from almost 119K only three weeks ago. This shows the A$ has dealt with heavy selling during the past 3 or 4 weeks.

The COT Report reflects a condensed version of currency traders collective market votes as derived from the U.S. Commodity Futures Trading Commission’s weekly data output. Any opinions, news, research, analyses, prices, or other information contained in this discussion post are provided as general market commentary, and do not constitute investment advice from CashBackForex and/or CashBackForexUSA