US dollar

Outlook
Bullish
DAILY UPDATEThe US dollar is currently selling off against all major currencies except the Japanese yen. The buck is currently the weakest against the Australian dollar and the euro. Yesterday, the US dollar index (a broad measure of the currency) made its fourth higher-high in a row. As we wrote in yesterday' update, the dollar was looking extended and was more likely to give back some of its recent gains. Today's US dollar index trading range is 95.50 - 97.0.  Looking at the latest geopolitical developments, a Chinese delegation is set to travel to the United States for trade talks later this month. As second-tier news does not typically move currencies, the buck is more likely to be selling off...

Euro

Outlook
Bearish
DAILY UPDATEThe euro is currently strengthening against all major currencies except the Australian dollar. After making a series of consecutive lower-lows, we wrote that the euro was looking oversold and due for a bounce in  yesterday's daily update. Note that the recent sell-off was accompanied by above-average trading volumes - a sign that bears remain in control. Today's EUR/USD trading range is 1.130 - 1.1530.  There are no significant fundamental developments related to the euro today. Instead, the currency is mostly trading as a function of risk sentiment and developments across financial markets. Having moved into oversold territory yesterday, the common currency is enjoying a rebound today...

British pound

Outlook
Bearish
DAILY UPDATEPound sterling is currently strengthening against all major currencies except the Australian dollar. The pound is making its biggest gains versus the Japanese yen today. Yesterday, the pound sold off against the US dollar for the tenth consecutive day in a row. Note that the recent sell-off in the currency was accompanied by accelerating trading volumes - a bearish sign suggesting that traders are selling with conviction. Today's GBP/USD trading range is 1.2660 - 1.2940.  Looking at recent UK economic data, yesterday's inflation figures were decidedly mixed. While both headline and core inflation figures matched consensus estimates, year-over-year inflation is weaker relative to its pe...

Japanese yen

Outlook
Bearish
DAILY UPDATEThe Japanese yen is currently selling off against all major currencies. The yen is currently the weakest against the Australian dollar. Yesterday, the yen was the strongest performing major currency. The yen rose sharply in response to waning risk sentiment which continues to be the major driver behind the currency's recent moves. Today's USD/JPY trading range is 110.10 - 113.20. Taking a closer look at what happened yesterday, there has been a general 'risk-off' tone to markets over the past 24 hours. Emerging markets continue to come under pressure despite a recovery in the Turkish lira. Equity markets and commodity prices traded lower across the board. In a classic flight to safety,...

Australian dollar

Outlook
Bearish
DAILY UPDATEThe Australian dollar is strengthening against all major currencies today, and is the strongest major currency. Yesterday, the Aussie ended the day flat against the US dollar. AUD/USD initially traded lower, but the Aussie found support at 0.720 (which is the bottom end of our indicated trading range) and recovered its losses. Yesterday's support and subsequent short-term recovery is evidence that the Aussie was starting to show signs of being oversold. Today's AUD/USD trading range is 0.720 - 0.7340. Taking a closer look at yesterday's events, Chinese financial markets were broadly lower. More specifically, the Shanghai Composite and Hang Seng index both posted big losses after China'...

Canadian dollar

Outlook
Bearish
DAILY UPDATEThe Canadian dollar is currently rallying against the US dollar and the Japanese yen, while selling off against the euro and the British pound. Yesterday, the loonie ended the day lower against all other major currencies. USD/CAD moved higher despite a broader pullback in the US dollar. Today's trading range for USD/CAD is 1.3130 - 1.3390. Yesterday's weakness in the Canadian dollar can be attributed to a broader move in commodity prices, particularly the fall in crude oil prices. As we noted in today's crude oil update, the commodity has recently entered a bearish trend. Taking a closer look at commodity prices, the Thomson Reuters Core Commodity Index is down by more than 1%, while W...

Gold

Outlook
Bearish
DAILY UPDATEGold prices are currently flat. Yesterday, the precious metal sold off sharply. Despite limited moves in the US dollar and falling US Treasury yields, gold fell by more than 1%. In recent history, large moves lower in the gold price have been accompanied by significant trading volumes. This is a bearish signal that suggests traders are selling gold with high conviction. Today's trading range for gold is $1,160 - $1,197. Gold prices typically reflect financial conditions. As global growth decelerates, a falling gold price suggests that financial conditions are too tight. This is especially the case as the Fed has signaled more rate hikes in the near future. Historically, the Fed has fai...

Crude oil

Outlook
Bearish
DAILY UPDATECrude oil prices are rebounding today. Both WTI and Brent crude are currently slightly higher. Yesterday, crude oil prices fell sharply. Since downgrading our outlook for crude oil last week, prices have fallen by more than 3%. Crude prices have fallen for three consecutive days amid high trading volumes. This is a sign that traders are increasingly bearish on the commodity. Today's trading range for WTI is $61.80 - $67.90. ​​​​​​​ Crude oil fell sharply following yesterday's EIA figures. The data reported a large rise in US crude oil stocks. Inventories rose by 6.805M barrels last week, significantly higher than analysts expectations of a reduction of 2.499M barrels. This is a clear s...

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

In our last commentary on the Australian dollar, we wrote that the currency was an enticing short opportunity thanks to slowing Chinese growth and a bearish trend. Specifically, we recommended shorting AUD/USD as means to express a bearish view on the currency. Since that time, the pair has weakened (from 0.7560), and is trading around 0.7280 on August 13.  Going forward, we see further...

Published 

Looking at this week’s Commitments of Trader’s Report, the biggest changes in speculator positions can be seen in the US dollar index, British pound, Canadian dollar and gold. “Risk on” currencies, such as the euro and the Australian dollar, remain unattractive relative to the US dollar. Even traditional safe haven assets, such as gold and the Swiss franc, are presently no match for the dollar. T…

Published 

In our last commentary on the US dollar, we wrote that the buck was set to move higher given underlying economic trends. Specifically, US growth and inflation was likely to keep accelerating, while the opposite was likely to happen in most major regions outside the United States. Following the publication of our last commentary, the US dollar index has strengthened from around 91.80 to around...

Published 
Tags: US dollar

Looking at this week’s Commitments of Traders Report, the biggest change in speculator positions can be seen in the Canadian dollar and the Australian dollar. Following several weeks of rising net positions in the US dollar (a sign that the investor community is increasingly bullish on the currency), changes were relatively limited this week. In the short-term, the US dollar’s ongoing ascent appe…

Published 

Looking at this week’s Commitments of Traders Report, there are significant changes in the US dollar index, Japanese yen, British pound, Australian dollar and Swiss franc net speculator positions. For the past several weeks, speculators have been loading up on the US dollar while selling risk and inflation-sensitive assets. Japanese yen positions are down for the fifth week in a row, while gold p…

Published 

Looking at this week’s Commitments of Traders Report, there are significant changes in Japanese yen, gold and Canadian dollar net positions. Looking at our implied measure of US dollar positioning (the inverse of net positions in other major currencies), speculators increased their bets on the US dollar for the fifth week in a row. The significant drop in both Japanese yen and gold net positions …

Published 

There are few notable changes in speculator positions according to the latest Commitments of Traders Report. The build-up in long US dollar positions has slowed this week, relative to the significant growth we saw in recent history. This being said, speculators continued to buy the US dollar this week while reducing their positions in all other major currencies (except the Swiss franc). The bigge…

Published 

There are a very significant number of changes in this week’s Commitments of Traders Report. The biggest change can be seen in speculator net positions in the US dollar. As the world’s benchmark currency, the big move in the dollar is influencing other major currencies and commodities. As a result, there are significant changes in net positions in the euro, Japanese yen, British pound, Australian…

Published 

Looking at this week’s Commitments of Traders Report, there are relatively few changes in net speculator positions across major currencies and commodities. The biggest change in positions can be seen in the Japanese yen, where speculators continue to flip-flop. As we wrote in last week’s edition of this report, traders remain undecided regarding the future direction of the yen.

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