US dollar

Outlook
Bullish
DAILY UPDATEThe US dollar is currently trading sideways against all major currencies except the Australian dollar. The Australian dollar is up sharply today against all major currencies. Yesterday, the US dollar index (a broad measure of the currency against its largest peers) ended the day flat after moving into oversold territory. This week's trading volumes in US dollar index futures remains significantly below 30-day averages. Weak volumes are a sign that traders are not trading with a lot of conviction. Today's US dollar trading range is 94.50 - 96.10. The buck continues to look oversold today.    Thanks to a light calendar, there have been no significant economic data releases over the past ...

Euro

Outlook
Bearish
DAILY UPDATEThe euro is currently trading sideways against all major currencies except the Australian dollar. The Australian dollar is rallying against all major currencies today. Yesterday, the euro ended the day slightly lower against the US dollar. While trading volumes in euro futures remain below 30-day averages, note that trading volumes accelerated for the third session in a row yesterday. Weak volumes are a sign that traders not trading with a lot of conviction. Today's EUR/USD trading range remains 1.150 - 1.1710. The EUR/USD pair ran out of steam above the top-end of yesterday's indicated trading range. For the second day in a row, the pair entered overbought conditions and faced signifi...

British pound

Outlook
Bearish
DAILY UPDATEThe British pound is currently steady against all major currencies except the Australian dollar. The Australian dollar is rallying against all major currencies today. Yesterday, the British pound ended the day flat against the US dollar. Despite a number of Brexit-related headlines, trading volumes in British pound futures were significantly below 30-day averages. Today's GBP/USD trading range is 1.2840 - 1.3230.  Today is an important day for sterling given upcoming inflation figures. Thanks to steepening base effects and slowing commodity price growth, the outlook for inflation is less benign. Looking at historical data, inflation rose from 2.6% to 3% between July 2017 and October 20...

Japanese yen

Outlook
Bearish
DAILY UPDATEThe Japanese yen is currently selling off against all major currencies, except the US dollar, today. Yesterday, the yen fell sharply against the US dollar. Despite the significant move, note that trading volumes in yen futures were significantly below 30-day averages. Today's USD/JPY trading range is 110.10 - 112.40.  Looking at today's Bank of Japan interest rate decision, the BoJ made no changes to its yield curve control policy and left short-term interest rates at -0.1%. The BoJ also made no changes to its forward guidance, maintaining its pledge to continue buying Japanese government bonds (JGBs) and local equities. With regards to the economic outlook, BoJ Governor Kuroda said th...

Australian dollar

Outlook
Bearish
DAILY UPDATEThe Australian dollar is currently rallying against all major currencies except the British pound and the euro. Yesterday, the Australian dollar ended the day higher against the US dollar. Following its most recent low in mid-September, the aussie has been rebounding. Note that trading volumes accelerated significantly yesterday relative to the previous session - a sign that traders are buying the rebound with conviction. Today's AUD/USD trading range is 0.7050 - 0.7350.  Thanks to a relatively light economic calendar, there were no significant domestic developments today. While the RBA's Kent delivered a speech (covering the relationship between money and credit), he did not address m...

Canadian dollar

Outlook
Neutral
DAILY UPDATEThe Canadian dollar is currently rallying against safe haven currencies including the US dollar and trading sideways against 'risk on' currencies such as the euro. Yesterday, the loonie ended the day higher against its US counterpart. Notably, trading volumes accelerated relative to the previous session - a sign that traders bought the currency with increasing conviction. Today's USD/CAD trading range is 1.2890 - 1.3230.  Looking at the economic calendar, there are no notable events on the schedule this week. Manufacturing sales for July (announced yesterday) were better than analyst estimates. More importantly, the previous figures were revised higher. While manufacturing sales do not...

Gold

Outlook
Bearish
DAILY UPDATEGold prices are currently slightly higher. Yesterday, the precious metal ended the day slightly lower. While trading volumes were below 30-day averages yesterday, note that volumes were ahead compared to the previous day (Monday). Gold has been trading in a fairly narrow range since late August. Today's gold trading range remains $1,179 - $1,210.   Looking at gold today, the precious metal is benefiting from recent weakness in both the US dollar index and US Treasury bond yields. As we wrote in today's US dollar daily update, the buck continues to trade in oversold territory. On the other hand, US Treasury yields are running out of steam after 10-year Treasuries rose above 3% yesterday...

Crude oil

Outlook
Neutral
DAILY UPDATECrude oil prices are currently higher. Both WTI and Brent crude are making small gains today. Yesterday, both benchmarks surged following a report that Saudi Arabia was comfortable with Brent prices rising above $80/barrel. Trading volumes in European and US crude oil futures also accelerated relative to the previous session and compared to 30-day averages. Today's WTI trading range is $67.50 - $71.90.  As we wrote in yesterday's crude oil daily update, the upcoming OPEC+ meeting in Algeria (scheduled for September 23) was expected to result in looser supply conditions. Previously, Saudi Arabia had communicated its desire to increase supply by 400,000 barrels/day. According to a Reuter...

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

Older Posts

Subscribe to our daily update email

Currencies
Commodities