The Currency Report

The Currency Report  

Large Currency Speculators added to net longs in Canadian dollar, latest CFTC data shows…

2016 05 16 CD

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 (Commitments of Traders Data)

The latest CFTC data indicates Large Currency Speculators trimmed net short Euro bets by just 7.4%, while adding to US dollar longs by over 36%.  Will we see a reversal to net long Euro and net short US dollar in next week’s report? We will wait and see, but my suggestion is it will occur sooner rather than later.  Note the key 2015 high (1.1718 EUR/USD) on the weekly Euro chart above may be tested as this occurs.  It is also important to note as well the recent reversal to net long Canadian dollar has held, and that new position grew again this week (by 36%) following last week’s 57% rise.

Significant percent change moves highlight one of the main goals of this report; which is to keep an eye on what large speculators have been doing over the longer term with their positions, with the assumption that large speculators are positioning in the direction of the longer term trend.  Consider the potential implications for higher commodity prices if large speculators position for a lower US dollar and are correct…(discussion to be continued in next week’s Currency Report).

Due to the delayed dissemination of this information, this information should in no way be considered in any way as a trade recommendation or advice.

Highlighted Currency, net position and % change

Net Longs                                            Net Shorts

CD +25k, +36%                  EU -21k, -7.4%

DX +12k, +32%

The most recent Commitments of Traders data shows some significant percentage changes in non-commercial futures only net positions from the prior week including the following:

A most important 36% increase from 18,943 to 25,874 contracts net long of the Canadian dollar, which represents 5.56% of open interest;

A trimming 13.54% decrease from 40,408 to 34,935 contracts net short of the British Pound, which represents 2.29% of open interest;

A small 3.88% decrease from 61,521 to 59,137 contracts long of the Japanese Yen, which represents 1.44% of open interest;

An important 7.40% decrease from 23,619 to 21,872 contracts net short of the Euro, which represents 0.51% of open interest;

A sharp 27.17% decline from 52,395 to 38,158 contracts long the Australian dollar, which represents 11.23% of open interest;

A stubborn 32.08% increase from 9,174 to 12,117 contracts net long of the US Dollar Index, which represents 4.34% of open interest;


For those interested in Stock Index Futures, it may be of interest that over the same period large speculators increased new recent net long positions in E-Mini S&P 500 Stock Index Futures by 95.06% from 10,087 to 19,676 contracts (net long).  Note the similarity of recent short covering and reversal to long in S&P to recent Canadian dollar activity.  Feel free to contact me directly for more specific information.

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Good Trading,

Paul Kavanaugh

There is a substantial risk of loss in trading futures and options. Futures, options and foreign exchange trading are not appropriate for all investors.  Past performance is not indicative of future results. The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or commodities.  FuturePath Trading, LLC, its officers and directors may in the normal course of business have positions, which may or may not agree with the opinions expressed in this report. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction.

Paul Kavanaugh

About Paul Kavanaugh

Paul Kavanaugh has been active in the commodity markets as an NFA member for 24 years. He specializes in working with clients by providing innovative personalized value-added services. His guidance with regards to risk management has attracted large commercial hedgers. His 2 1/2 decades of experience in navigating commodity bull and bear markets and extremes in volatility, while maintaining an even keel temperament, has made him an appreciated right hand man to select CTAs and professional traders. Paul’s early apprenticeship with one of the more renowned pioneers of systems development and seasonal work landed him position as Senior Analyst for one of the world’s largest clearing firms at the time. His published currency analysis achieved a remarkably broad following. He then branched out to supporting traders through brokerage services, often 24 hours round the clock. Paul has been happy to share his knowledge with new clients. His warm-hearted enthusiasm for both the markets and people provides an old school blend missing in today’s hard and fast world of electronic trading. At the same time, his current affiliation with the long established Independent Brokerage Firm, FuturePath Trading, LLC, allows him to offer clients the resources of multiple Clearing firms and execution platforms. Paul received his degree in Economics from Albion College in Michigan. He has been a frequent contributor to CBS, CNBC, and the WSJ over the years.