Archive for Forex and Currency News

Trade Of The Week: EURCHF to challenge major resistance?

By ForexTime 

  • EURCHF bullish on D1/W1 charts
  • Big week for minor currency
  • Watch out for EU data + SNB decision
  • Key level of interest at 0.9640
  • Bloomberg model: 76% chance EURCHF – (0.95270 – 0.97098)

Our focus falls on the EURCHF which could be rocked by the EU data dump and Swiss National Bank (SNB) rate decision this week.

The minor currency pair remains bullish on the daily/weekly timeframe with prices approaching a key resistance level at 0.9700.

Note: The last time the EURCHF secured a weekly close above 0.9700 was back in July 2023.

With volatility likely to remain the name of the game for the EURCHF, a major breakout could be on the horizon.

Here are 3 factors to keep an eye on:

  1. SNB rate decision 

The SNB is widely expected to keep interest rates unchanged at 1.75% on Thursday. So, investors will direct their attention towards the policy statement, news conference, and CPI projections for clues on the central bank’s next move.

Given how economic growth held steady and 0.3% in Q4 and inflation edged down to 1.2% in February, the SNB is expected to move ahead with its first rate cut at the next policy meeting in June.

Traders are currently pricing in a 25% probability of a 25-basis point SNB cut in March with a cut fully priced in by June 2024.

  • The CHF could weaken if the SNB strikes a dovish note and signals that the next move will be a rate cut. Such an outcome may push the EURCHF higher.
  • Should the SNB sound more hawkish than expected and offer no fresh clues on rate cuts, this may support the Swiss Franc, dragging the EURCHF lower as a result.

 

  1. Key EU data 

This is a week packed with top-tier economic data from Europe which could impact bets around when the ECB will start cutting interest rates in 2024. 

On Monday, the Eurozone inflation in February was confirmed at 2.6% year-on-year, down from the 2.8% seen in January. While this was the lowest rate in three months, it’s still above the ECB’s target of 2%. It will be wise to keep a close eye on the Eurozone consumer confidence and PMIs along with top data on Germany, the largest economy in Europe.

Traders are currently pricing in an 80% probability of a 25-basis point ECB cut by June with a cut fully priced by July 2024. 

  • Should overall data from Europe support expectations around the ECB cutting interest rates by Summer, this is likely to weaken the euro – sending the EURCHF lower.
  • A positive set of economic reports that push back rate cut bets may support the EUR, sending the EURCHF towards the 0.9700 resistance.

 

  1. Technical forces

The EURCHF is respecting a bullish channel on the daily timeframe and trading above the 50, 100 and 200-day SMA.

  • A solid breakout and daily close above 0.9640 may open a path towards 0.9700 – a level not seen since July 2023.
  • Should prices slip below 0.9590, this could trigger a selloff towards the 200-day SMA at 0.9558 and 0.9530.

Bloomberg’s FX model points to a 76% chance that EURCHF will trade within the 0.95270 – 0.97098 range over the next week.


Forex-Time-LogoArticle by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

AUD/USD Stabilizes Amid Chinese Economic Data and US Inflation Concerns

By RoboForex Analytical Department

The Australian dollar has momentarily halted its downward trajectory against the US dollar, stabilizing around the 0.6565 mark. With a lack of significant domestic data from Australia, the AUD’s movements are largely influenced by the performance of the Chinese yuan and economic developments from China. Recently, the offshore yuan weakened to its lowest in a week at 7.2 against the US dollar, following a series of macroeconomic updates from China.

China’s industrial output showed an impressive year-on-year increase of 7.0%, exceeding both the anticipated 6.5% growth and the previous rate of 4.6%. Capital investment also outperformed expectations, registering a 4.2% year-on-year rise compared to the forecasted 3.2%. Retail sales growth in February was reported at 5.5% year-on-year, albeit a slowdown from January’s 7.4% increase. Additionally, the January employment report indicated a slight uptick in unemployment, rising to 5.3% from the prior 5.1%.

Despite these positive indicators from China, the yuan’s valuation remains pressured by robust US inflation data, which complicates the Federal Reserve’s pathway to easing monetary policy. The prevailing market expectation now leans towards a potential 25 basis point rate cut by the Fed in June, with around a 60% probability of this outcome, a shift from earlier predictions of a spring rate cut.

Given Australia’s close economic and trade ties with China, these statistics from China are particularly significant for the AUD’s performance.

Technical analysis of AUD/USD

The H4 chart analysis of AUD/USD indicates a consolidation phase around the 0.6570 level, with expectations of a downward breakout leading to the continuation of the decline towards the local target of 0.6506. After reaching this target, a potential corrective movement to 0.6570 (testing from below), followed by a further drop to 0.6477, is anticipated. The MACD indicator, with its signal line pointing downwards, supports this bearish scenario.

On the H1 chart, the AUD/USD pair has concluded its declining wave structure at 0.6570, with a consolidation phase currently observed around this mark. A downward breakout from this consolidation is expected today, aiming for the 0.6506 level. Upon achieving this target, the onset of a corrective phase to 0.6570 (testing from below) may be considered. The Stochastic oscillator, currently above 80 and poised to descend to 20, corroborates the likelihood of this continuation in the bearish trend.

Disclaimer

Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.

Mexican Peso Speculator bets touching most bullish levels in 4 years

By InvestMacro

Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC).

The latest COT data is updated through Tuesday March 12th and shows a quick view of how large market participants (for-profit speculators and commercial traders) were positioned in the futures markets. All currency positions are in direct relation to the US dollar where, for example, a bet for the euro is a bet that the euro will rise versus the dollar while a bet against the euro will be a bet that the euro will decline versus the dollar.

Weekly Speculator Changes led by Japanese Yen & British Pound

The COT currency market speculator bets were slightly higher overall this week as six out of the eleven currency markets we cover had higher positioning and the other five markets had lower speculator contracts.

Leading the gains for the currency markets was the Japanese Yen (16,521 contracts) with the British Pound (12,066 contracts), the EuroFX (8,096 contracts), the US Dollar Index (3,087 contracts),  the Brazilian Real (407 contracts) and Bitcoin (358 contracts) also having positive weeks.

The currencies seeing declines in speculator bets on the week were the Canadian Dollar (-11,037 contracts), the Australian Dollar (-6,097 contracts), the New Zealand Dollar (-4,763 contracts), the Mexican Peso (-2,294 contracts) and the Swiss Franc (-319 contracts) also registering lower bets on the week.

Speculators boosting Mexican Peso positions to best levels in 4 years

Highlighting the COT currency data this week is the continued strength in the Mexican peso positioning. Large speculators slightly trimmed (-2,294 contracts) their bullish bets for the Mexican peso this week but have been pushing their bets to multi-year highs over the past month.

Last week, on March 5th, the large speculator position rose by over +12,772 contracts and ascended to the most bullish level (+106,586 contracts) of the past 208 weeks, dating back all the way to March 10th of 2020. Since the beginning of November, speculators have increased their bullish bets in thirteen out of nineteen weeks and have added a total of +72,995 contracts to the overall net bullish standing, going from +31,297 contracts on October 31st to a total of +104,292 contracts this week.

Helping the Mexican peso positioning has been the record high interest rates in Mexico at 11.25 percent which gives the currency an interest rate differential advantage over the other major currencies. The Mexican economy has been on a steady growth path as well with the year-over-year GDP expanding by 2.5 percent in the 4th quarter following 3.5 percent growth in the third quarter of 2023 and 3.4 percent growth in the second quarter.

The Mexican peso exchange rate has been strongly trending higher in the currency markets versus the US Dollar and the other major currencies. The peso exchange level versus the US Dollar, on Thursday, reached its highest level since July of 2023 at just over the 0.0600 exchange rate. The peso has also been higher versus all of the other major currencies we track on a year-over-year basis.

The Bank of Mexico does meet on March 21st with a market expectation of a possible interest rate reduction — so we will see if the peso can continue to shine in 2024 following a great 2023 when the peso had an approximate gain versus the USD by a little over 14 percent.


Currencies Net Speculators Leaderboard

Legend: Weekly Speculators Change | Speculators Current Net Position | Speculators Strength Score compared to last 3-Years (0-100 range)


Strength Scores led by British Pound & Mexican Peso

COT Strength Scores (a normalized measure of Speculator positions over a 3-Year range, from 0 to 100 where above 80 is Extreme-Bullish and below 20 is Extreme-Bearish) showed that the British Pound (100 percent) and the Mexican Peso (99 percent) lead the currency markets this week. The New Zealand Dollar (67 percent), EuroFX (52 percent) and Bitcoin (51 percent) come in as the next highest in the weekly strength scores and above their midpoint (50 percent) of the last three years.

On the downside, the Australian Dollar (6 percent), the Swiss Franc (8 percent) and the US Dollar Index (18 percent) come in at the lowest strength levels currently and are in Extreme-Bearish territory (below 20 percent). The next lowest strength score is the Japanese Yen (27 percent).

Strength Statistics:
US Dollar Index (17.9 percent) vs US Dollar Index previous week (11.4 percent)
EuroFX (52.0 percent) vs EuroFX previous week (48.6 percent)
British Pound Sterling (100.0 percent) vs British Pound Sterling previous week (92.0 percent)
Japanese Yen (27.0 percent) vs Japanese Yen previous week (12.3 percent)
Swiss Franc (8.1 percent) vs Swiss Franc previous week (9.1 percent)
Canadian Dollar (33.2 percent) vs Canadian Dollar previous week (42.4 percent)
Australian Dollar (5.6 percent) vs Australian Dollar previous week (11.2 percent)
New Zealand Dollar (67.4 percent) vs New Zealand Dollar previous week (80.9 percent)
Mexican Peso (98.7 percent) vs Mexican Peso previous week (100.0 percent)
Brazilian Real (45.8 percent) vs Brazilian Real previous week (45.2 percent)
Bitcoin (51.4 percent) vs Bitcoin previous week (46.1 percent)


British Pound & Mexican Peso top the 6-Week Strength Trends

COT Strength Score Trends (or move index, calculates the 6-week changes in strength scores) showed that the British Pound (24 percent) and the Mexican Peso (14 percent) lead the past six weeks trends for the currencies. The US Dollar Index (12 percent), the Bitcoin (12 percent) and the New Zealand Dollar (10 percent) are the next highest positive movers in the latest trends data.

The Swiss Franc (-41 percent) leads the downside trend scores currently with the Australian Dollar (-30 percent), Canadian Dollar (-24 percent) and the Japanese Yen (-19 percent) following next with lower trend scores.

Strength Trend Statistics:
US Dollar Index (12.3 percent) vs US Dollar Index previous week (3.1 percent)
EuroFX (-6.1 percent) vs EuroFX previous week (-9.4 percent)
British Pound Sterling (24.1 percent) vs British Pound Sterling previous week (17.9 percent)
Japanese Yen (-19.4 percent) vs Japanese Yen previous week (-42.8 percent)
Swiss Franc (-40.8 percent) vs Swiss Franc previous week (-36.2 percent)
Canadian Dollar (-23.9 percent) vs Canadian Dollar previous week (-9.6 percent)
Australian Dollar (-29.8 percent) vs Australian Dollar previous week (-28.0 percent)
New Zealand Dollar (9.9 percent) vs New Zealand Dollar previous week (25.5 percent)
Mexican Peso (14.0 percent) vs Mexican Peso previous week (18.4 percent)
Brazilian Real (-12.5 percent) vs Brazilian Real previous week (-20.1 percent)
Bitcoin (12.1 percent) vs Bitcoin previous week (4.7 percent)


Individual COT Forex Markets:

US Dollar Index Futures:

US Dollar Index Forex Futures COT ChartThe US Dollar Index large speculator standing this week totaled a net position of 6,186 contracts in the data reported through Tuesday. This was a weekly advance of 3,087 contracts from the previous week which had a total of 3,099 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 17.9 percent. The commercials are Bullish-Extreme with a score of 88.0 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 13.4 percent.

Price Trend-Following Model: Downtrend

Our weekly trend-following model classifies the current market price position as: Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

US DOLLAR INDEX StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:66.611.910.8
– Percent of Open Interest Shorts:43.136.110.1
– Net Position:6,186-6,381195
– Gross Longs:17,5473,1272,853
– Gross Shorts:11,3619,5082,658
– Long to Short Ratio:1.5 to 10.3 to 11.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):17.988.013.4
– Strength Index Reading (3 Year Range):Bearish-ExtremeBullish-ExtremeBearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:12.3-12.0-2.0

 


Euro Currency Futures:

Euro Currency Futures COT ChartThe Euro Currency large speculator standing this week totaled a net position of 74,407 contracts in the data reported through Tuesday. This was a weekly increase of 8,096 contracts from the previous week which had a total of 66,311 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 52.0 percent. The commercials are Bullish with a score of 50.0 percent and the small traders (not shown in chart) are Bearish with a score of 27.2 percent.

Price Trend-Following Model: Uptrend

Our weekly trend-following model classifies the current market price position as: Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

EURO Currency StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:27.056.011.7
– Percent of Open Interest Shorts:16.770.67.5
– Net Position:74,407-104,60430,197
– Gross Longs:193,998402,08184,306
– Gross Shorts:119,591506,68554,109
– Long to Short Ratio:1.6 to 10.8 to 11.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):52.050.027.2
– Strength Index Reading (3 Year Range):BullishBullishBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-6.14.34.7

 


British Pound Sterling Futures:

British Pound Sterling Futures COT ChartThe British Pound Sterling large speculator standing this week totaled a net position of 70,451 contracts in the data reported through Tuesday. This was a weekly increase of 12,066 contracts from the previous week which had a total of 58,385 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 100.0 percent. The commercials are Bearish-Extreme with a score of 1.5 percent and the small traders (not shown in chart) are Bullish with a score of 74.6 percent.

Price Trend-Following Model: Uptrend

Our weekly trend-following model classifies the current market price position as: Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

BRITISH POUND StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:44.437.610.8
– Percent of Open Interest Shorts:19.066.07.8
– Net Position:70,451-78,9208,469
– Gross Longs:123,285104,33830,123
– Gross Shorts:52,834183,25821,654
– Long to Short Ratio:2.3 to 10.6 to 11.4 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):100.01.574.6
– Strength Index Reading (3 Year Range):Bullish-ExtremeBearish-ExtremeBullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:24.1-23.310.3

 


Japanese Yen Futures:

Japanese Yen Forex Futures COT ChartThe Japanese Yen large speculator standing this week totaled a net position of -102,322 contracts in the data reported through Tuesday. This was a weekly lift of 16,521 contracts from the previous week which had a total of -118,843 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 27.0 percent. The commercials are Bullish with a score of 69.5 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 96.5 percent.

Price Trend-Following Model: Strong Downtrend

Our weekly trend-following model classifies the current market price position as: Strong Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

JAPANESE YEN StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:16.963.714.6
– Percent of Open Interest Shorts:48.333.713.2
– Net Position:-102,32297,8774,445
– Gross Longs:54,923207,47847,586
– Gross Shorts:157,245109,60143,141
– Long to Short Ratio:0.3 to 11.9 to 11.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):27.069.596.5
– Strength Index Reading (3 Year Range):BearishBullishBullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-19.415.312.9

 


Swiss Franc Futures:

Swiss Franc Forex Futures COT ChartThe Swiss Franc large speculator standing this week totaled a net position of -17,870 contracts in the data reported through Tuesday. This was a weekly reduction of -319 contracts from the previous week which had a total of -17,551 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 8.1 percent. The commercials are Bullish-Extreme with a score of 88.9 percent and the small traders (not shown in chart) are Bearish with a score of 28.0 percent.

Price Trend-Following Model: Weak Uptrend

Our weekly trend-following model classifies the current market price position as: Weak Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

SWISS FRANC StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:13.669.011.6
– Percent of Open Interest Shorts:35.334.224.8
– Net Position:-17,87028,703-10,833
– Gross Longs:11,23656,8859,575
– Gross Shorts:29,10628,18220,408
– Long to Short Ratio:0.4 to 12.0 to 10.5 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):8.188.928.0
– Strength Index Reading (3 Year Range):Bearish-ExtremeBullish-ExtremeBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-40.851.5-34.2

 


Canadian Dollar Futures:

Canadian Dollar Forex Futures COT ChartThe Canadian Dollar large speculator standing this week totaled a net position of -30,874 contracts in the data reported through Tuesday. This was a weekly reduction of -11,037 contracts from the previous week which had a total of -19,837 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 33.2 percent. The commercials are Bullish with a score of 70.4 percent and the small traders (not shown in chart) are Bearish with a score of 24.1 percent.

Price Trend-Following Model: Weak Uptrend

Our weekly trend-following model classifies the current market price position as: Weak Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

CANADIAN DOLLAR StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:18.659.015.6
– Percent of Open Interest Shorts:34.643.315.3
– Net Position:-30,87430,296578
– Gross Longs:35,964113,94230,149
– Gross Shorts:66,83883,64629,571
– Long to Short Ratio:0.5 to 11.4 to 11.0 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):33.270.424.1
– Strength Index Reading (3 Year Range):BearishBullishBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-23.921.5-13.3

 


Australian Dollar Futures:

Australian Dollar Forex Futures COT ChartThe Australian Dollar large speculator standing this week totaled a net position of -90,840 contracts in the data reported through Tuesday. This was a weekly lowering of -6,097 contracts from the previous week which had a total of -84,743 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 5.6 percent. The commercials are Bullish-Extreme with a score of 90.6 percent and the small traders (not shown in chart) are Bearish with a score of 37.0 percent.

Price Trend-Following Model: Weak Uptrend

Our weekly trend-following model classifies the current market price position as: Weak Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

AUSTRALIAN DOLLAR StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:18.166.09.1
– Percent of Open Interest Shorts:57.623.512.1
– Net Position:-90,84097,678-6,838
– Gross Longs:41,591151,73120,858
– Gross Shorts:132,43154,05327,696
– Long to Short Ratio:0.3 to 12.8 to 10.8 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):5.690.637.0
– Strength Index Reading (3 Year Range):Bearish-ExtremeBullish-ExtremeBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-29.829.7-15.9

 


New Zealand Dollar Futures:

New Zealand Dollar Forex Futures COT ChartThe New Zealand Dollar large speculator standing this week totaled a net position of 2,465 contracts in the data reported through Tuesday. This was a weekly reduction of -4,763 contracts from the previous week which had a total of 7,228 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 67.4 percent. The commercials are Bearish with a score of 30.0 percent and the small traders (not shown in chart) are Bullish with a score of 78.3 percent.

Price Trend-Following Model: Weak Uptrend

Our weekly trend-following model classifies the current market price position as: Weak Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

NEW ZEALAND DOLLAR StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:31.150.18.9
– Percent of Open Interest Shorts:26.458.35.4
– Net Position:2,465-4,3371,872
– Gross Longs:16,39126,4084,700
– Gross Shorts:13,92630,7452,828
– Long to Short Ratio:1.2 to 10.9 to 11.7 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):67.430.078.3
– Strength Index Reading (3 Year Range):BullishBearishBullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:9.9-9.97.0

 


Mexican Peso Futures:

Mexican Peso Futures COT ChartThe Mexican Peso large speculator standing this week totaled a net position of 104,292 contracts in the data reported through Tuesday. This was a weekly decline of -2,294 contracts from the previous week which had a total of 106,586 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 98.7 percent. The commercials are Bearish-Extreme with a score of 1.1 percent and the small traders (not shown in chart) are Bullish with a score of 52.8 percent.

Price Trend-Following Model: Strong Uptrend

Our weekly trend-following model classifies the current market price position as: Strong Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

MEXICAN PESO StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:54.639.72.8
– Percent of Open Interest Shorts:23.073.30.8
– Net Position:104,292-110,8106,518
– Gross Longs:180,140131,1449,172
– Gross Shorts:75,848241,9542,654
– Long to Short Ratio:2.4 to 10.5 to 13.5 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):98.71.152.8
– Strength Index Reading (3 Year Range):Bullish-ExtremeBearish-ExtremeBullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:14.0-14.17.6

 


Brazilian Real Futures:

Brazil Real Futures COT ChartThe Brazilian Real large speculator standing this week totaled a net position of 8,687 contracts in the data reported through Tuesday. This was a weekly gain of 407 contracts from the previous week which had a total of 8,280 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 45.8 percent. The commercials are Bullish with a score of 52.0 percent and the small traders (not shown in chart) are Bullish with a score of 58.3 percent.

Price Trend-Following Model: Strong Downtrend

Our weekly trend-following model classifies the current market price position as: Strong Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

BRAZIL REAL StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:53.339.67.1
– Percent of Open Interest Shorts:35.762.41.9
– Net Position:8,687-11,2532,566
– Gross Longs:26,31419,5323,502
– Gross Shorts:17,62730,785936
– Long to Short Ratio:1.5 to 10.6 to 13.7 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):45.852.058.3
– Strength Index Reading (3 Year Range):BearishBullishBullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-12.511.64.1

 


Bitcoin Futures:

Bitcoin Crypto Futures COT ChartThe Bitcoin large speculator standing this week totaled a net position of -994 contracts in the data reported through Tuesday. This was a weekly lift of 358 contracts from the previous week which had a total of -1,352 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 51.4 percent. The commercials are Bullish with a score of 66.2 percent and the small traders (not shown in chart) are Bearish with a score of 34.2 percent.

Price Trend-Following Model: Strong Uptrend

Our weekly trend-following model classifies the current market price position as: Strong Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

BITCOIN StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:82.24.95.9
– Percent of Open Interest Shorts:85.44.72.8
– Net Position:-99459935
– Gross Longs:24,9771,4861,800
– Gross Shorts:25,9711,427865
– Long to Short Ratio:1.0 to 11.0 to 12.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):51.466.234.2
– Strength Index Reading (3 Year Range):BullishBullishBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:12.1-24.43.5

 


Article By InvestMacroReceive our weekly COT Newsletter

*COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets.

The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting). See CFTC criteria here.

Yen Weakens Despite Japan’s Deflation Exit

By RoboForex Analytical Department

The USD/JPY pair is rising, reaching 148.28 on Friday. The US dollar is strengthening across the market following the release of US retail sales data.

This information is prompting market participants to reassess their expectations for the future of the US Federal Reserve’s interest rate policy. The Fed could interpret strong retail sales as a significant inflationary factor, potentially delaying the timing of any rate cut.

On Friday, Japan’s Finance Minister Shunichi Suzuki stated that the Japanese economy is no longer suffering from deflation, as there is a strong trend towards wage growth. This statement is particularly noteworthy as previous comments from officials, including the Prime Minister, suggested the country had yet to fully emerge from a deflationary state.

According to Suzuki, the government has mobilised all efforts to support this wage growth trend.

The next Bank of Japan (BoJ) meeting is scheduled for next week, and high expectations surround its outcome. The interest rate could finally move out of negative territory, currently at -0.1% annually. The BoJ remains the only major central bank that maintains negative borrowing costs.

Technical Analysis of USDJPY

On the H4 chart, USDJPY has completed a growth wave to 148.64. Today, we consider the likelihood of forming a consolidation range below this level. Exiting upwards from this range could open the potential for a growth wave to 149.20, with the trend possibly continuing to 150.00. The MACD oscillator confirms this scenario, with its signal line breaking above zero and aiming for new highs.

On the H1 chart, USDJPY is forming a consolidation range around 148.22. We expect an upward exit from this range and the continuation of the growth wave to 149.20. Following the completion of this level, a correction back to 148.22 (testing from above) is possible. Subsequently, the growth is expected to reach the main target of the wave at 150.00. The Stochastic oscillator supports this scenario, with its signal line above the 20 mark and ready to move towards 80.

 

Disclaimer

Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.

Canadian Dollar Seeks Opportunities for Growth

By RoboForex Analytical Department

The USDCAD pair remains within a sideways range, with the Canadian dollar occasionally showing a tendency to strengthen.

Recent DES data revealed that Canadian households have become more affluent. In Q4 2023, their “net” worth increased by 1.8%, or 300 billion Canadian dollars, smoothing out the decline seen in the previous quarter.

This increase can be attributed to the recovery in financial market returns, as both stocks and bonds appreciated during the period. This dynamic compensated for the “modest” decline in the country’s housing market value. Overall, Canadians became 712.7 billion CAD richer in 2023 than they were the previous year.

Borrowing rates in Q4 of last year increased for the second consecutive quarter, with households attracting 29.5 billion CAD, primarily in mortgage loans, followed by consumer loans. These figures raise concerns, suggesting that some households may become more indebted than others. Canada’s economy’s loan debt is currently estimated at 2.9 trillion CAD, with three-quarters of these debts being mortgage loans. However, in the economic context, household debt as a percentage of Canadians’ disposable income accounts for 178.7% in Q4, slightly lower than in Q3 of last year and the lowest level since the end of 2015. Thus, while debts exist, the overall picture is relatively stable.

USDCAD technical analysis

On the H4 chart of USDCAD, a declining wave is forming towards 1.3403. Today, we are considering the development of its fifth structure. After reaching the target level, a correction to 1.3511 is possible. Subsequently, we expect the beginning of a new declining structure towards the local target of 1.3354. This scenario is confirmed by the MACD indicator, whose signal line is below the zero mark and heading strictly downward towards new lows.

On the USDCAD H1 chart, the first structure of the fifth declining wave has been completed. Today, we are considering the possibility of a correction to 1.3488. After its completion, we expect a decline to 1.3454, then a rise to 1.3471 (testing from below), and then a decline to 1.3420. This is the first target. The stochastic oscillator, with its signal line above the 80 mark and preparing to drop to 20, also confirms this scenario.

Disclaimer

Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.

US Dollar Strengthens Amid Inflation Data

By RoboForex Analytical Department

As of Wednesday, the EUR/USD pair is hovering near 1.0925 after experiencing a volatile session, with expectations for a more subdued week ahead.

Recent statistical data highlighted higher-than-expected inflation in the US for February, prompting adjustments to predictions about the easing of monetary policy by the Federal Reserve in June.

The Consumer Price Index (CPI) rose by 0.4% month-on-month last month, aligning with expectations. Year-on-year, the indicator expanded to 3.2% from 3.1%. Core inflation in the US increased by 0.4% month-on-month, surpassing the forecast of 0.3%. From year to year, the indicator rose to 3.8% from the previous 3.7%.

While these figures did not come as a “surprise,” they reaffirmed that inflation is more persistent than previously thought. Specific details of the reports offer local hope for improvement, although it is clear overall that the situation could be more comfortable for the Fed to make significant decisions.

The market interpreted these developments favourably for the US dollar, shifting investor preferences towards it.

Market focus is squarely on the Fed’s June meeting, with the March and May sessions attracting less interest. The Fed will likely require more statistical information by then.

As indicated by public data, investor expectations suggest a 69% chance of a rate cut in June, down from 71% earlier in the week.

In what would be the most optimistic forecast, the Fed will probably manage to cut rates only three times this year.

Technical Analysis of EUR/USD

On the H4 chart, EUR/USD is forming the first wave of decline towards 1.0777. The first structure of this wave and its correction have been completed. Today, we will consider the likelihood of breaking the minimum of the first structure and continuing the development of the wave to the local target level of 1.0815. The MACD indicator confirms this scenario, with its signal line above zero and a sharply decreasing histogram, indicating the continuation of the downtrend.

On the H1 chart, EUR/USD has formed the first wave of a decline structure to 1.0900 and a correction to 1.0939. The market has essentially delineated a consolidation range around the level of 1.0939. Today, a decline to the lower boundary of this range is expected. With a breach of 1.0900, a further decline to 1.0880 is anticipated, with the trend potentially continuing to 1.0815. The Stochastic oscillator confirms this scenario, with its signal line below the 50 mark, expecting a continuation of the decline towards 20.

Disclaimer

Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.

Japanese Yen Surges to Monthly High as Economy Shows Signs of Growth

By RoboForex Analytical Department

The Japanese yen strengthened against the US dollar on Monday, reaching a month-long peak following the release of statistics indicating Japan’s return to economic growth in Q4 2023. This development effectively ends the previously declared technical recession.

Japan’s GDP experienced a quarterly increase of 0.1% and an annual growth of 0.4%. These figures revise earlier estimates, suggesting 0.1% and 0.4% declines, respectively. In comparison, the Japanese economy contracted by 0.8% quarterly and 3.3% annually in Q3 2023.

The positive economic data have fuelled market speculation about a potential interest rate hike by the Bank of Japan, with some economists and traders anticipating such a move as soon as March.

Bank of Japan board member Junko Nakagawa recently commented on the visible prospects for achieving inflation targets and a positive wage cycle, further supporting the yen.

The Japanese currency is currently benefitting from the weakening US dollar and a drop in US government bond yields amid the Federal Reserve’s dovish rhetoric.

Technical Analysis of USD/JPY

On the H4 USD/JPY chart, a correction wave to the 146.48 level has been completed (tested from above). The market is now forming a consolidation range above this level, expecting to break upwards and initiate the fifth growth wave towards 152.72. The MACD oscillator supports this scenario, with its signal line trading below zero at minimums and poised for growth.

On the H1 USD/JPY chart, a correction wave to 146.48 has finished. A growth impulse to 147.26 and its correction to 146.55 have been executed, essentially setting the consolidation range boundaries. With an upward breakout, growth towards the 148.00 level is anticipated. This target is the first in the growth wave. The Stochastic oscillator confirms this scenario, with its signal line above the 50 mark and strictly heading towards 80.

Disclaimer

Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.

Trade of the Week: Yen bulls to clap back?

By ForexTime 

  • JPY is G10’s best-performer today, also month-to-date
  • Yen climbing on creeping bets for imminent Bank of Japan hike
  • Tuesday’s US inflation release will feed market’s main obsession
  • Friday’s Japan wage negotiations results are key for BoJ
  • Bloomberg forecast: USDJPY to trade between 144.48 – 148.65 this week

The Japanese Yen is already off to a strong start this week!

Not only is it the best-performing G10 currency against the US dollar today, but also for the month:

  • So far today (Monday, March 11th): USDJPY is down 0.24% at the time of writing
  • So far this month: USDJPY has fallen by 2.2%
NOTE: USDJPY goes down when the Japanese Yen strengthens against the US dollar.

 

Why is the Yen climbing?

Markets are starting to restore hopes, once again, that the Bank of Japan (BoJ) is now (finally? truly?) ready to trigger a rate hike.

Markets had previously made similar predictions in recent years past, only to be left sorely disappointed when the BoJ left its rates unchanged, even as other major central banks raised their own rates aggressively in recent years.

Keep in mind that the BoJ is the last central bank to still adopt a negative interest rate regime, keeping its rates at -0.1%.

At present, markets are forecasting the following:

  • 65.7% chance of a BoJ rate hike at its March 19th policy decision
  • 86.4% chance of a BoJ rate hike by its April 26th policy decision
NOTE: A currency tends to strengthen when its central bank is perceived to be raising its benchmark rates.

 

However, JPY bulls (those hoping the Yen will strengthen) have a lot more ground to cover before their pride can be fully restored.

After all, the Yen has endured a torrid time in recent years.

JPY has been the weakest G10 currency against the US dollar in 2 out of the past 3 years.

 

Events Watchlist

This week, two key events could determine whether Yen bulls can get some much-needed ammo to stand up to their critics:

1) Tuesday, March 12th: US February inflation data

Here are the economists’ forecasts for the February consumer price index (CPI), which is used to measure headline inflation growth:

  • Headline CPI year-on-year (February 2024 vs. February 2023): 3.1%
    If so, this would match January’s 3.1% year-on-year number
  • Headline CPI month-on-month (February 2024 vs. January 2024): 0.4%
    If so, this would be higher than January’s 0.3% month-on-month number
  • Core CPI (excluding food and energy prices, which are more volatile) year-on-year: 3.7%
    If so, this would be lower than January’s 3.9% month-on-month number
  • Core CPI month-on-month: 0.3%
    If so, this would be lower than January’s 0.4% month-on-month number

Why does this matter?

The Federal Reserve (US central bank) has a mandate to subdue red-hot inflation since the pandemic, which it has done so by aggressively hiking US interest rates in recent years.

Markets want to know how soon could this battle against inflation be over, and when the Fed can begin to return US rates to lower, and more “normal” levels.

This guessing game has been the market’s primary obsession in recent years.

This sets up every monthly CPI data release as arguably the most important piece of economic data for investors and traders worldwide.
Potential Scenarios:

  • Overall, if the US inflation data come in below market expectations, that should pave the way for the Fed to lower its benchmark rates in the months ahead.

    Such expectations should weaken the US dollar, while dragging USDJPY lower.

  • However, if the US inflation data exceed market expectations, that may further delay a Fed rate cut.

    Such expectations should support the US dollar, while potentially prompting USDJPY to unwind some of its recent losses.

 

 

2) Friday, March 15th: Japan wage negotiations results

Japan’s largest union group, Rengo, is set to announce the results from its annual wage negotiations.

On average, workers unions are demanding for a pay hike of 5.85% this year – its largest raise since 1993.

For comparison, a year ago, these unions demanded for an increase of 4.49%.
Why does this matter?

Higher salaries would imply stronger spending power among Japanese consumers, which could support inflationary pressures (business can raise prices sustainably).

The Bank of Japan wants to see sustained inflation, despite the headline CPI having exceeded its 2% target since April 2022.

A massive pay hike for Japanese workers could help underpin the country’s inflation outlook while likely paving the way for the long-awaited BoJ rate hike.

Potential Scenarios:

  • If Rengo announces that it secured a higher-than-expected pay raise, that could deliver a massive boost to the Yen.
  • However, if Rengo disappoints Yen bulls and the BoJ with its wage negotiation results, that may pull JPY back lower, while sending USDJPY back closer to recent heights.

 

 

Key levels

According to Bloomberg’s FX forecast model, USDJPY is expected to trade within the 144.48 – 148.65 range this week.

Potential resistance:

  • 147.20 region: key battleground between bulls and bears since August 2023
  • 100-day SMA
  • 148.00 – 148.65: price region which includes psychologically-important level and the upper bound of Bloomberg’s forecasted range

 

Potential support:

  • 200-day SMA
  • 145.00: psychologically-important level
  • 144.48: notable battleground between bulls and bears since 2022 / lower bound of Bloomberg’s forecast model

 

Watch for technical rebound

Note that USDJPY’s 14-day relative strength index (RSI) is already flirting with the 30 level.

When the 14-day RSI hits or goes below 30, that meets the textbook criteria for “oversold” conditions.

Recall how USDJPY experienced such a technical rebound was seen when the RSI last hit 30 back in December 2023.

Hence, further declines this week may once again trigger another short-lived technical rebound for USDJPY.

 


Forex-Time-LogoArticle by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Week Ahead: USDInd primed for data heavy week

By ForexTime 

  • Data packed week could rock USD
  • Watch out for US CPI report
  • USDInd bearish on D1 but RSI oversold
  • Key level of interest at 102.80

Even as markets brace for potential volatility ahead of the US jobs report this afternoon (Friday 8th March), investors are mindful of the string of key data releases in the week ahead.

Top-tier economic reports from across the globe and political developments in the United States will be in focus. However, watch out for the US CPI report which could be the main market mover:

Saturday, 9th March

  • CNH: China aggregate financing, PPI, CPI, new yuan loans

Sunday, 10th March

  • Daylight Savings Time in the US begins
  • Ramadan holiday starts at sundown for Muslims worldwide

Monday, 11th March  

  • JPY: Japan GDP
  • US budget proposal from President Joe Biden

Tuesday, 12th March

  • AUD: Australia business confidence
  • EUR: Germany CPI
  • JPY: Japan PPI
  • GBP: UK jobless claims, unemployment
  • USD: US February CPI report

Wednesday, 13th March

  • EUR: Eurozone industrial production
  • NZD: New Zealand food prices
  • GBP: UK industrial production
  • GER40: Volkswagen, Adidas earnings

Thursday, 14th March

  • USD: US PPI, retail sales, initial jobless claims

Friday, 15th March

  • NZD: New Zealand PMI
  • USD: US industrial production, University of Michigan consumer sentiment

The scheduled data releases could present fresh trading opportunities across financial markets.

But our attention falls on the USDInd which tumbled this week following dovish comments by Fed Chair Jerome Powell.

The USD Index tracks how the dollar is performing against a basket of six different G10 currencies, including the Euro, British Pound, Japanese Yen, and Canadian dollar.

The USDInd could be set for more action and here are 3 reasons why:

  1. US February CPI report

The February US Consumer Price Index (CPI) report published on Tuesday may influence bets around when the Fed will start cutting rates.

Markets are forecasting: 

  • CPI year-on-year (February 2024 vs. February 2023) to remain unchanged at 3.1%.
  • Core CPI year-on-year to cool 3.7% from 3.9% in the prior month.
  • CPI month-on-month (February 2024 vs January 2024) to rise 0.4% from 0.3%.
  • Core CPI month-on-month to cool 0.3% from 0.4% in the prior month.

Although headline inflation is expected to remain unchanged at 3.1%, the annual core is expected to have cooled to 3.7%its lowest level since April 2021. Ultimately, further evidence of disinflation may fuel expectations around the Fed cutting interest rates.

  • A softer-than-expected US CPI report may send the USDInd lower.
  • Should inflation remain sticky, the USDInd has the potential to push higher.

 

  1. Key US data

Looking beyond the US CPI report, it would be wise to keep a close eye on other important data points including PPI, retail sales and industrial production among other  releases. These reports may provide fresh insight into the health of the US economy and additional clues on the Fed’s next move.

Traders are currently pricing in a 28% probability of a 25 basis point cut in May with this jumping to 96% by June 2024.

Note: These odds are likely to not only be influenced by the US jobs report, but incoming US inflation data along with other key releases next week.

  • Should overall US economic data support the case for lower US interest rates, this may drag the USDInd lower.
  • However, if overall data exceeds forecasts and supports the argument around US rates remaining higher for longer, this could boost the USDInd.

 

  1. Technical forces

The USDInd is under pressure on the daily charts with prices trading below the 50, 100 and 200-day SMA. Although bears seem to be gaining momentum, the Relative Strength Index (RSI) signals that prices are heavily oversold.

  • A solid daily close below the 102.80 level may trigger a decline towards 102.00 and 101.35.  
  • Should prices push back above the 50-day SMA, this may encourage a move towards the 200-day SMA at 103.75 and 104.30.


Forex-Time-LogoArticle by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

EUR/USD Shows Strength Amid Anticipation of Key Events

By RoboForex Analytical Department

The EUR/USD pair is exhibiting resilience, navigating around the 1.0850 mark on Tuesday, following a sequence of rises in the previous two sessions. The current market atmosphere is one of cautious optimism, as participants brace for significant upcoming events, including a speech by Jerome Powell, the head of the US Federal Reserve, and the release of February’s employment sector statistics on Friday. Particularly, the focus will be on the wage growth components for February, which are speculated to have nearly tripled, potentially indicating a diminishing impact of pro-inflationary factors.

The consensus among market observers is leaning towards an expectation that the Federal Reserve may initiate the first interest rate cut of this monetary cycle in June, with possibilities of further reductions occurring up to three times by year-end.

EUR/USD Technical Analysis

On the H4 chart, the EUR/USD pair is currently carving out a consolidation pattern around the 1.0831 level, with a recent extension up to 1.0866. A downward correction to 1.0831, testing the level from above, could materialize today. An upward break from this consolidation could herald the start of a growth wave towards 1.0900, at which point the current growth phase is anticipated to conclude, potentially giving way to a new downtrend with an initial target at 1.0680. This outlook is supported by the MACD indicator, which shows the signal line above zero and a sharply rising histogram, indicating a continuation of the growth trend.

The H1 chart reveals a consolidation phase around the 1.0831 level, with a growth structure targeting 1.0870 currently unfolding. The local target of 1.0866 for this wave has been achieved, with a correction back to 1.0831 anticipated. Following this correction, the focus will shift towards the structure’s growth potential to 1.0870. The Stochastic oscillator, currently below the 50 mark and expected to drop to 20, validates this scenario, suggesting a potential for further fluctuations within this bullish trend.

Disclaimer

Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.