Forex: Currency Speculators add to Dollar longs as Euro, Aussie & Canadian Dollar positions decline


The latest Commitments of Traders (COT) report, released on Friday by the Commodity Futures Trading Commission (CFTC), showed that large futures speculators increased their overall US dollar long positions last week for a second straight week while traders slightly added to their bearish view of the euro currency.

Non-commercial futures traders, including hedge funds and large speculators, added to their total US dollar long positions to $26.31 billion on July 17th from a total long position of $24.58 billion on July 10th, according to the CFTC COT data and calculations by Reuters which calculates the dollar positions against the euro, British pound, Japanese yen, Australian dollar, Canadian dollar and the Swiss franc.


Individual Currencies:

EuroFX: Currency speculator sentiment for the euro decreased slightly last week to decline for a second consecutive week. Euro net short positions or bets against the currency rose to 167,249 contracts on July 17th from the previous week’s total of 165,705 net short contracts on July 10th. The latest euro sentiment standing is the lowest level since June 12th when positions equaled 195,187 short contracts.


The COT report is published every Friday by the Commodity Futures Trading Commission (CFTC) and shows futures positions as of the previous Tuesday. It can be a useful tool for traders to gauge investor sentiment and to look for potential changes in the direction of a currency or commodity. Each currency contract is a quote for that currency directly against the U.S. dollar, where as a net short amount of contracts means that more speculators are betting that currency to fall against the dollar and net long position expect that currency to rise versus the dollar. The graphs overlay the forex spot closing price of each Tuesday when COT trader positions are reported for each corresponding spot currency pair.

GBP: British pound sterling positions improved ever so slightly last week to interrupt a streak of two consecutive weekly declines. British pound sterling speculative positions totaled 7,453 net short contracts on July 17th following a total of 7,622 net short contracts on July 10th.


JPY: Japanese yen speculative contracts rose slightly for a second consecutive week last week. Yen positions edged higher to a total of 11,121 net long contracts reported on July 17th following a total of 8,952 net long contracts on July 10th. Japanese positions have now continued to be positive on the long side for a seventh consecutive week after crossing over on June 5th.


CHF: Swiss franc speculator positions declined last week after improving for two consecutive weeks. Speculator positions for the Swiss currency futures registered a total of 23,090 net short contracts on July 17th following a total of 17,584 net short contracts as of July 10th.


CAD: Canadian dollar positions declined lower for a third week in a row and fell over to the short side for the first time since January. Canadian dollar positions dipped to a total of 1,208 net short contracts as of July 17th following a total of 4,338 net long contracts that were reported for July 10th. This is the first time Canadian dollar positions have been on the short side since January 30th when large speculators contracts equaled 19,409 short positions.



AUD: The Australian dollar positions fell last week after improving for previous five consecutive weeks. Aussie speculative futures positions decreased to a total net amount of 13,931 long contracts on July 17th after rising to a total of 19,065 net long contracts as of July 10th.



NZD: New Zealand dollar futures speculator positions increased for a sixth straight week and advanced higher on the long side to the highest level since the beginning of May. NZD contracts increased to a total of 6,939 net long contracts as of July 17th following a total of 5,591 net long contracts on July 10th. The kiwi contracts are now at their highest level since May 1st when contracts equaled 8,025 long positions.


MXN: Mexican peso speculative contracts advanced for a sixth straight week and continued higher after crossing over into positive territory on July 3rd. Peso positions rose to a total of 34,989 net long speculative positions as of July 17th following a total of 25,222 long contracts that were reported for July 10th. Mexican peso positions have now reached their highest level in the last ten weeks.


COT Currency Data Summary as of July 17, 2012
Large Speculators Net Positions vs. the US Dollar

EUR -167249
GBP -7453
JPY +11121
CHF -23090
CAD -1208
AUD +13931
NZD +6939
MXN +34989


10 Questions with Author & Currency Trader Rob Booker

By Zac Storella,

Today, I am pleased to bring you our latest forex interview with forex trader, author and trading mentor Rob Booker. He is the author of many trading books including “Adventures Of A Currency Trader” and “The Currency Trader’s Handbook”. Currently, Rob has an informative and entertaining daily trading show ( where he analyzes currency trades and forex related events with his colleague Rob Wilson.

10 Questions with Rob Booker:

1. How did you become involved in the forex trading world?

I ran a business together with a friend in the late 1990s but we consistently managed to spend more money than we brought in. I knew how to make money, and sometimes a lot of it. But we couldn’t get the expenses under control. We were hiring new people every week. We were buying new servers, new furniture, making the office look good, taking a side trip to New York – the list goes on. And on. Eventually it was time to close the business even though it was making a ton of money. We ended with a lot of business debt and I needed a way to pay it off.

Rob Booker Forex Interview Soon after I spoke to a friend of mine who worked at Bear, Stearns in San Francisco. I hoped he might have a job for me. Instead he just had a lot of advice about what I should not do: I should not get involved in the financial markets, or an investment bank, or as a stock broker, or anything else markets-related. And for sure, under no circumstances should I even remotely consider trying to become a currency trader. This was the year 2000. He said that the currency traders were the worst in the business, and it was the most impossible place to make money in the entire world. It was worse than a casino, because in currency trading they took your money but they didn’t serve free drinks.

And that was it. I knew what I wanted to do.

2. What markets do you mostly trade and do you have any preference on the currency pairs you trade?

I trade forex but I am gradually moving to trade more options. Currently I’ve been trading an options demo account for more than a year and I love it. This is all on equities. I like buying time for a trade to work out. For a lot of people options is about math and formulas. For me it’s just about buying some time for a trade to work out. It is immensely appealing to me. I have been fascinated by the concept of time, and in particular how much time it takes for things to “work out,” or become “balanced,” and so options is a natural fit for me. But – and the pun here is unintentional – I am taking my time to enter this new trading arena.

For now, I trade any currency pair you can throw at me, with two primary exceptions. I have no interest in the USD/JPY. Right now the US Dollar and the Japanese Yen are low-yield, safe-haven currencies, and trading them against one another is like trying to kiss yourself in the mirror: You might get very excited about it, but once you do
actually do it, you realize it’s not going to turn into anything fulfilling. The second exception is the Swiss Franc. I want nothing to do with the Swiss currency for now, especially against the Euro. One hundred percent of patients on life support in a hospital have a more lively pulse than the EUR/CHF. People get excited about the prospects
that the Swiss National Bank will intervene and send this pair shooting one thousand pips higher. This could happen, but when? How much time do I want to tie up my capital in the hope that I can correctly predict the actions of a central bank? Most traders don’t realize that the Swiss National Bank has been intervening for months now to simply keep the EUR/CHF at 1.2000. It’s just not a risk:reward I’m happy to take on.

What I do love right now are the exotic cross pairs. The EUR/SEK, the TRY, the CZK and other currencies that most people never look at. The MXN – Mexican Peso – is a favorite. When most people ignore something, you get a unique opportunity to trade a financial instrument that moves in smoother trends. At least this is my point of view. Because they’re different they’re scary. I like that.

3. How did you get your forex trading education?

When I started trading there were no mentors or instructors. There was a guy but he wouldn’t teach me much. He talked to me for a couple of weeks but then he stopped answering my emails. I don’t hold it against him. I hate emails.

I then read every book I could get my hands on. I read about point & figure charting, I read Alexander Elder’s classic Trading For A Living. And then I read Martin Pring and John Murphy. Most of all, Edwards and Magee, the authors of Technical Analysis Of Stock Trends. Sometimes I think about digging up these men’s bodies, because I
assume they’re dead, and kissing them both on the mouth. Maybe I wouldn’t take it that far. But I probably would. Every trader should read that book no matter how long it takes and how much it bores you. It is the bible of support and resistance. Did I have a mentor? Well, the more I think about it the more I’d have to say that these two
fellows mentored me as much as anyone ever did. While answering this question for you I just ordered the 9th Edition on because I want to have the newest copy of it.

4. How often do you trade?

I trade every day. I trade from the 1 hour and 15 minute charts. Much of what I do can be, and has been, automated, so that I either don’t need to touch any buttons at all – or I simply need to check on it and set it up and turn it off each day.

5. Do you use technical analysis, fundamental, and/or sentiment analysis in your trading decisions?

I love fundamentals. I love talking about, learning about, and following economic trends. It’s the most enjoyable part of being a currency trader. And this fundamental analysis has no influence on my trading whatsoever. It’s paradoxical that I love it so much and don’t use it at all.

Let me give you an analogy. If  you work as a mechanic, and you love your job, and all day long you work on Toyotas, you might go home and night and just absolutely love Formula One racing. You don’t use your knowledge of Formula One racing in your daily work to make a living from fixing Toyotas. But you love race cars.

I love fundamentals and I love talking about them. But I don’t need them to do my daily work.

To answer the question more completely, I am a technical trader and more specifically a support and resistance trader. You can watch TFL-TV – a free broadcast we do every day – and see that my charts have a few simple lines drawn across them and that’s it. Over the years I have traded and made money from all sorts of indicators. But
in my heart I’m mostly just a support and resistance guy.

6. Do you have any favorite economic indicators or technical indicators?

Support and resistance. That’s number one. Then I love divergence and built an indicator to plot it for me. Actually I built several. I love divergence – when price is moving one way but volume or a momentum indicator is moving in the opposite direction. The longer I think about divergence the more I realize it applies to our relationships,
work, and so much else. Imagine for a moment that you ask your girlfriend if she’ll go to Vegas with you one weekend. She says “Yes!” but then you notice that she’s not enthusiastic about the trip. That’s divergence. I could go on forever but one of the best talents of a trader in any market is the ability to recognize when the mass of
traders has become less enthusiastic about a particular trend. That’s where the money is made.

7. Is there a market outside of currencies that forex traders should look at?


8. We are about halfway through 2012, Do you have any thoughts on what we may see for major themes for the second half of 2012?

I see these major themes:

a) A weaker Europe? As Europe cleans up its debt mess, will the world view it as weaker overall? I think the answer is yes. This could send the EUR/USD as low as 1.2150 quite easily as as far as 1.1900. I think the market is looking for a reason to test that lower level in the EUR/USD. That’s an important level.

b) Will Japan ever come out of recession? This isn’t just a theme for 2012. It’s a theme for the next two years. This is important because the rest of the world is trying to do what Japan did: Keep interest rates low in order to stimulate the economy. It didn’t work in Japan. Why would it work anywhere else?

c) Job growth in the United States. Can the U.S. begin to produce 150,000 or more jobs per month, on average, through the rest of the year? If not, then we’re facing a weak economy, continued low interest rates, and that has implications for the value of the dollar. What are those implications? It depends. If the stock market can (inexplicably)
climb despite anemic job growth, then there’s a chance the dollar climbs. If the stock market falters, and the Fed does QE3 (creating new money), then the US dollar is going to weaken. A new round of quantitative easing by the Fed is good for a 1,000 pip rise in the EUR/USD.

9. Do you have any advice to someone starting out in currency trading?

Read Edwards and Magee until your eyeballs fall out. Get a mentor, someone who can watch and comment on what you are doing. Do the obvious: Cut off your losing trades fast, even if you think you’re not giving them a chance to turn profitable. You can always get back in. And let your winning trades run, even if you are desperate to bank a
winner. Where should you cut off your losers and how far should you ride your winners? Read Edwards and Magee.

10. For those out there who may have not heard of or seen, could you give us a little summary of what it is and the best way for our readers to find out more?

It’s where I teach traders what I did in order to trade for a living. I publish trade ideas and a lesson every day about what it takes to trade for a living. And we do it while having a ton of fun. Also, we talk a lot about trading strategies – how to find one, test it, implement it – the things I wish I’d had help doing when I first started out.

Thank you Rob for taking the time to answer my questions. To see more of Rob’s trading show be sure to visit his site at and also you can find out more about rob at


See more of our past forex interviews here.

What’s In The News: July 17, 2012

From, This is the financial news network. I’m Chuck Pierce. Here’s what’s in the news for Tuesday July 17, 2012. The Wall Street Journal reports the IMF lowered its outlook for global economic growth and urged policy makers to take bolder actions to bolster the faltering recovery. The fund forecast the world economy will expand just 3.5% this year, the past decade’s slowest annual projection apart from 2009. The Wall Street Journal also reports Goldman Sachs Group (NYSE:GS) is building an in-house bank to lend money to wealthy people and companies, in a significant shift that underlines the harsh business climate facing Wall Street since the financial crisis. Reuters reports the National Futures Association said it will conduct a review of its audit division as it seeks to answer criticism that it missed two decades of fraud at failed Iowa brokerage Peregrine Financial Group. Also, the CME Group (NYSE:CME), responsible for regulating 45 of the biggest brokers, will conduct a review of dozens of firms nationwide, sources say. Bloomberg reports Citigroup (NYSE:C) began asking Facebook (NASDAQ:FB) users over the weekend whether Web surfers would be willing to use the social-networking service to do banking. Finally, Bloomberg also reports Procter & Gamble (NYSE:PG) has spoken to financial and communications advisers to help manage activist investor Bill Ackman as demands grow to jettison executives or assets, sources say. Last week, Ackman bought into the company and is likely to push for a management change and large asset sales. For more financial news and analysis follow us on Twitter @FNNOnline or check out our website at

What To Watch–July17th 2012

From, this is the Financial News Network, your source for the latest business news. Here’s a few things to watch for in the financial world today July 17.Goldman Sachs (NYSE:GS) beating analyst estimates on its second-quarter earnings this morning. The company posted an EPS of $1.78 per share on revenue of $1.33 billion. That is a 5% increase in revenue from the same quarter last year. The only bad news for the company is the 11% decrease in profits over the second quarter due to trading losses. But this has not deterred traders this morning. Goldman Sachs stock is up over 2%.HSBC (NYSE:HSBC) in trouble this morning as U.S. Senate reports are claiming the British bank allowed the laundering money for various illegal operations around the world. The probe into the bank ends a year-long inquiry with a review of 1.4 million documents and 75 interviews. There will be a hearing today with HSBC officials focused on the matter. The Senate will also have claims against the Office of the Comptroller of the Currency, a top regulator which, according to reports, failed to properly monitor HSBC. And Johnson & Johnson (NYSE:JNJ) is another company releasing their earnings this morning. The company posted an EPS of $1.30, basically in line with estimates of $1.29 a share. Revenue for the quarter fell 0.7% to $16.48 billion, below analyst estimates of $16.69 billion. This was lower than Johnson & Johnson expected and cited the negative impact of a stronger dollar as the cause. This led the company to cut its full-year forecast to the range of $5.00 to $5.07. Currently, JNJ stock is down close to 1%.Those were a few things to watch out for here on the Financial News Network. For more coverage and analysis of the business world check us out at or follow us on twitter @FNNOnline. I’m Chuck Pierce.

Analyst Moves: HSH, TIF

Hillshire Brands (HSH) was upgraded by Credit Suisse (CS) to outperform from neutral with a $31 price target as the company has been cutting costs and volume should increase. Shares are higher by about half a percent.

IPO Watch: Palo Alto Networks

Palo Alto Networks announced that it is seeking a valuation more than double the multiple of rivals. The Internet-firewall technology firm seeks to raise $248 million in a share sale scheduled for July 19.

US Jobs Act Will Likely Curtail India’s Technology Outsourcing Sector, Says Moodys

Moody’s Investors Service said today in a statement that a proposed US law to offer tax breaks to businesses hiring locally would likely curtail growth in India’s technology outsourcing sector.The legislation to which they’re referring would offer a 20% tax credit to businesses for switching outsourced jobs back to the U.S. It discourages companies from moving work overseas. India depends on North America for more than half of its revenue in outsourcing. For more updates, follow us on Twitter @FNNOnline.