US dollar

Outlook
Bullish
DAILY UPDATEThe US dollar is currently trading sideways against all major currencies, except the Japanese yen. The yen is weakening against all major currencies today. Yesterday, the US dollar index (a measure of the currency against its largest peers) fell sharply. Despite the significant move, trading volumes in US dollar index futures were fairly light. Volumes both decelerated relative to the previous session and compared to 30-day averages. Today's US dollar index trading range is 93.80 - 95.90. The US dollar remains in oversold territory.  While the bottom-end of yesterday's trading range was 94.30, the buck had no troubles weakening significantly beyond that figure. We derive daily trading ...

Euro

Outlook
Bearish
DAILY UPDATEThe euro is currently steady against all major currencies, except the Japanese yen. The yen is selling off against all major currencies today. Yesterday, the euro surged against the US dollar. Trading volumes in euro futures also accelerated yesterday, rising both above the previous session and compared to 30-day averages. The combination of a significant move accompanied by accelerating trading volumes is a bullish sign as it suggests traders are buying the currency with confidence. Today's EUR/USD trading range is 1.1490 - 1.1790. The pair is once again in overbought territory today.  Over the past two weeks, 1.1710 has served as an area of significant resistance for the EUR/USD pair...

British pound

Outlook
Bearish
DAILY UPDATEThe British pound is currently slightly weaker against all major currencies except the Japanese yen. The yen is weakening against all major currencies today. Yesterday, the British pound surged against the US dollar following stronger-than-expected retail sales growth and significant weakness in the US dollar. After tapping the top-end of yesterday's trading range (1.3280), GBP/USD closed the day slightly lower at 1.3270. Notably, trading volumes in British pound futures accelerated relative to the previous session, and compared to 30-day averages. Once again, traders appeared to be buying the currency with increasing conviction. Today's GBP/USD trading range is 1.2850 - 1.3360.  Looki...

Japanese yen

Outlook
Bearish
DAILY UPDATEThe Japanese yen is currently weakening against all major currencies except the British pound. The pound is currently selling off against all major currencies. Yesterday, the yen continued to weaken against the US dollar. Trading volumes in yen futures accelerated relative to the previous session, but were in line with 30-day averages. As sentiment improves, traders are selling with the yen with increasing conviction. Today's USD/JPY trading range is 110.10 - 112.90. USD/JPY continues to be overbought (i.e. the yen is oversold).  Looking at recent economic data, domestic figures are improving. For the third month in a row, headline inflation accelerated relative to the previous month. ...

Australian dollar

Outlook
Bearish
DAILY UPDATEThe Australian dollar is currently steady against all major currencies, except the British pound and the Japanese yen. Both the pound and the yen are down against all major currencies today. Yesterday, the Australian dollar continued to make gains versus its US counterpart. Notably, trading volumes in Australian dollar futures have decelerated for the past three sessions - a sign that traders are not buying the rebound with as much conviction. Today's AUD/USD trading range is 0.7040 - 0.7320.  There are no significant domestic developments today. Instead, the Australian dollar is mostly tracking developments across financial markets. Following a significant rebound, the currency appear...

Canadian dollar

Outlook
Neutral
DAILY UPDATEThe Canadian dollar is currently mixed. The loonie is flat against the US dollar, while trading slightly higher against the British pound and the Japanese yen. The loonie is slightly weaker against the euro. Yesterday, the Canadian dollar ended the day slightly higher relative to its US counterpart. Trading volumes in Canadian dollar futures were flat yesterday, and remain in line with 30-day averages. Today's USD/CAD trading range is 1.2890 - 1.3230.  In yesterday's Canadian dollar update, we wrote that the currency was approaching the bottom-end of yesterday's trading range. After tapping the bottom-end of our indicated range (1.2890), the pair found support and moved higher. Looking...

Gold

Outlook
Bearish
DAILY UPDATEGold prices are currently slightly higher. Yesterday, the precious metal also ended the day slightly higher. Trading volumes in gold futures remain light compared to 30-day averages. As we have noted in the past, weak volumes are a sign that traders are not buying or selling with a lot of conviction. Today's gold trading range is $1,184 - $1,214. Note that gold is now trading in overbought territory.  Looking at gold today, the precious metal has strengthened above the top-end of yesterday's trading range ($1,210). The US dollar index is weakening while US Treasury bond yields are rising. While today's moves are not as extreme as what we saw yesterday, the pattern of dollar weakness co...

Crude oil

Outlook
Neutral
DAILY UPDATECrude oil prices are currently slightly higher. Both Brent and WTI are currently up by about 0.50%. Yesterday, both benchmarks ended the day slightly lower. Trading volumes in Brent futures markets remain elevated when compared to 30-day averages, and accelerated relative to the previous session. On the other hand, trading in WTI futures remains fairly light, and decelerated yesterday. Today's WTI trading range is $67.70 - $72.30.  Looking at recent developments, President Trump criticized OPEC in a tweet yesterday. Specifically he said that "The OPEC monopoly must get prices down now!" While crude oil prices rallied after Saudi Arabia signaled its comfort with Brent prices above $80/b...

Looking at this week’s Commitments of Traders Report, there are few notable changes in speculator positioning. The only move worth highlighting can be seen in Swiss franc net positions. For the second week in a row, speculators cut back on their short franc positions. As we wrote two weeks ago, the Swiss franc entered a bullish trend against the US dollar and is likely to keep strengthening for t…

Published 

Looking at this week’s Commitments of Traders Report, there are very few notable changes in speculator positioning. The biggest change can be seen in Swiss franc net positions. After the franc entered a bullish trend (a topic we covered last week), net short positions in the currency are down significantly this week. Short euro, short Swiss franc and long US dollar (based on our implied measure …

Published 

In this week’s Commitments of Traders Report, notable changes in speculator positions in major currencies and commodities are fairly limited. The most substantial changes can be seen in the British pound and the Swiss franc. Speculators significantly increased their bets against the British pound, while reducing their bets against the Swiss franc this week. Looking at extremes in positioning, sh…

Published 

In our last take on the euro in April, we wrote that the bullish case for the currency was running out of drivers. Specifically, we wrote that decelerating Eurozone growth (in rate-of-change terms), changes in trading patterns and overly bullish speculator sentiment was likely to weigh on the euro in the future. At the time, EUR/USD was trading around 1.23, near its 2018 high just above 1.2550. 

Published 
Tags: Euro

Looking at this week’s Commitments of Traders Report, changes in speculator positioning across major currencies and commodities are fairly limited. The most substantial changes can be seen in the US dollar index, British pound and Japanese yen. Net positions for all three currencies were up this week. While speculator positions in the US dollar index are up this week, they are falling based on o…

Published 

In our previous piece on pound sterling, we wrote that the currency was likely to weaken thanks to (1) slowing growth across Europe, (2) excessively bullish speculator sentiment and (3) Brexit-related woes. Thanks to the UK’s significant trading ties with the EU, we wrote that the pound was unlikely to escape a slowdown across the region. Furthermore, speculator positioning in the pound looked ex…

Published 

Looking at this week’s Commitments of Traders Report, changes in speculator positioning across major currencies and commodities are relatively limited. Speculators continue buying the US dollar, with positioning in both the US dollar index contract and our implied measure of US dollar positioning rising this week. In general, commodities are increasingly out of favor while speculators are now net…

Published 

The Canadian dollar is the best performing major ‘risk on’ currency this year. Against the US dollar, the loonie is down by 4.5% this year. This beats all other major ‘risk on’ currencies including the euro (-5.3%), British pound (-5.9%) and the Australian dollar (-6.9%). In our last commentary, we argued that the outlook for the Canadian dollar was neutral thanks to rising crude oil prices and …

Published 

On August 10, we downgraded our outlook on WTI from neutral to bearish thanks to a significant deterioration of the trend. We determine trends for a number of major currencies and commodities based on price, trading volumes and changes in volatility. Following WTI’s latest top at $75.37/barrel, sell-offs in the commodity have been accompanied by accelerating trading volumes. This is a...

Published 
Tags: Crude oil

In our previous commentary on gold, we wrote that gold prices would keep falling for three reasons: (1) accelerating US inflation, (2) decelerating growth outside the United States and (3) an ongoing slowdown across emerging markets. Ultimately, all three factors were supportive for the US dollar, gold’s ultimate nemesis. Since that time (May 17), gold prices have weakened from around $1,290 to $…

Published 
Tags: Gold

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