The Currency Report

The Currency Report  

Large Currency Speculators nearly reversed net long Australian dollar positions, cutting 99.5%, the latest CFTC data shows…

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2016 05 26 Aussie

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Aussie Chart

(Commitments of Traders Data)

The latest CFTC data indicates Large Currency Speculators trimmed net long Australian dollar by over 95% in the latest report, on the heels of last week’s 34% decline.  Also of interest in this week’s data is a significant build in net shorts of the Euro.

Aussie Chart

Will we see a reversal to net long Euro and net short US dollar in next weeks or months? 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 may be tested as this occurs.

Euro Chart

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 upcoming week’s Currency Reports).

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 +20k, -11%                                   EU -37k, +67%

AD +0.1k, -99.5%

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 trimming 11.71% decrease from 22,706 to 20,047 contracts net long of the Canadian dollar, which represents 2.15% of open interest;

A large 14.54% decrease 38,422 to 32,835 contracts net short of the British Pound, which represents 2.29% of open interest;

A small 2.34% decrease from 58,919 to 22,059 contracts long of the Japanese Yen, which represents 0.33 of open interest;

A resilient (not ready to reverse to long yet) 67.77% increase from 22,587 to 37,895 contracts net short of the Euro, which represents 4.37% of open interest;

A vaporizing 95.5% decline from 24,893 to just 124 contracts long the Australian dollar, which represents 21.61% of open interest;

A small but important 7.01% increase from 10,446 to 11,178 contracts net long of the US Dollar Index, which represents 1.19% of open interest;

(Source: www.CFTC.gov)

For those interested in Stock Index Futures, it may be of interest that over the same period large speculators reversed from net short 8,853 to net long 83,422 contracts, a 1042.3% change representing 3.10% of open interest.

For more information on FuturePath Trading, LLC, PhotonTrader and other trading software demos as well as our Futures and Forex Brokerage services email paul@fptrading.net or call 312.987.2080.

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.