COT Analysis, 4th October 2014. Market Overview:
A data intensive week draws to a close. USD continues to remain broadly supported, defying the overbought conditions and posting new multi year highs.
Speculative accounts pared their net EUR short positions, but added to net JPY short positions as of Sept 30, according to U.S. CFTC data. The COT report showed speculators had a net EUR short position of -137,525 contracts as of Sept. 30, versus last week’s net short of -141,965 contracts. This compared to the -161,423 contracts seen Sept. 2, which was the largest net EUR short since July 17, 2012 (-167,249 contracts). A contract size over 100,000 contracts is generally viewed as extended. Spec accounts had a net JPY short of -120,878 contracts as of Sept. 30, which compared to last week’s net JPY short of -105,422 contracts. This is the largest net JPY short since January 7, 2014 (-128,868 contracts). The record net JPY short of -188,077 contracts was seen June 26, 2007.
GBPUSD Outlook Neutral
Market participants continue to pare exposure to the GBP as the rate decisions are delayed and the market seems less certain of the BOE’s next move. Leveraged players still have a slight bias towards the long side currently
USDCHF OUTLOOK: Bullish
A clear favourite with USD bulls the CHF continues weaken against the backdrop of the serious support provided by the SNB the leveraged community continues
USDCAD OUTLOOK: Neutral
The grind higher continues relentlessly with open interest declining and most participants paring net exposure it is likely we continue to witness a period of consolidation with a gradual upward bias
EURUSD OUTLOOK: Bearish
The impulsive move lower continues to develop at pace, with key support levels eroding this week, talk of a bottom appears premature at this point. The reduction in net short exposure this week was confirmed with another impulsive move lower into Fridays close
AUDUSD OUTLOOK: Bearish
Aussie continues to be the recipient of the one two blow from declining commodity prices and the relentless USD strength. However, it is worth noting that institutional support is gathering pace and has just turned net positive, while specs continue to press shorts
USDJPY OUTLOOK: Bullish
The Yen remains heavily pressured with the clearly defined trend firmly intact into tonight’s close. Fridays new highs were confirmed with record net short JPY positioning so far this year