Forex Weekly Update & Outlook: US Dollar had Mixed Week vs Major Currencies

By CountingPips

The US dollar had mixed results last week against the other major currencies in the foreign exchange trading markets. The greenback continued its ascent against the commodity currencies (Australian dollar, New Zealand dollar, Canadian dollar) while falling against the European currencies (euro, British pound sterling, Swiss franc) and also declining against the Japanese yen for a second straight week.

This week’s fundamental calendar is full of important economic events with a major focus on Friday’s US nonfarm payrolls report while there is also three interest rate decisions (Australia, euro zone, United Kingdom) for the markets to digest. See the currency pair commentary & major economic highlights below.

Major Currency Pair Commentary:

EUR/USD — The euro made gains against the dollar last week but failed in its bid to surpass the major 1.30 level. This week will be all about overcoming this major level and whether this pair can build some upward momentum. Levels to watch this week are the previously mentioned 1.30 major and on the downside, the 1.2900 and also the 1.2850 level for weekly support.



eurusd-w5-31




GBP/USD — The pound sterling fought back last week from three straight weekly declines to gain against the US dollar as the pair bounced off the major psychological 1.50 level. Levels to watch this week are at 1.5250 level which has provided previous support and resistance. A close above this level would indicate bullish momentum going forward. On the downside, support comes in around the 1.5100 — 1.5090 area and then the major 1.50 support level which has provided price bounces for the past two weeks.



gbpusd-w5-31




USD/JPY — The dollar has fallen against the Japanese yen for two straight weeks and looks to test the major support and resistance area of 100.00. This is a major test for this currency pair and will likely determine the short-term direction as well as whether the 100 level will act as future support or future resistance. A close below 100 could bring a correction to the 97.50 target area.



usdjpy-w5-31




USD/CHF — The Swiss franc has gained against the dollar for two straight weeks as this currency pair has run into selling resistance above the 0.9750 area. This currency pair trades currently near the 0.9550 level which had acted as previous support and resistance. Levels to watch for this week are 0.9550 and 0.9500 while a close below 0.9500 could open up further decline to the 0.9250 area. Upside momentum will likely see resistance at the 0.9650 level and into the 0.9700 — 0.9750 area.



usdchf-w5-31




USD/CAD — US dollar has now risen against the Canadian dollar for four consecutive weeks and has broken out of the wedge pattern to the upside. Look for support around the 1.0300 — 1.0330 area with the 1.0250 level supporting below. Further upside momentum could bring into play the 1.0500 level which hasn’t been touched since November of 2011. Before that major level look for resistance into the 1.0400 area.



usdcad-w5-31




AUD/USD — The Aussie continues on its downfall against the dollar and has fallen for four straight weeks. Further decline will see the 0.9500 major level come into play with previous support (October 2011) sitting below the 0.9400 level around 0.9385. Upside momentum will likely see the 0.9650 resistance and into the 0.9700 — 0.9750 area.



audusd-w5-31




NZDUSD — The New Zealand dollar resumed its sharp downtrend against the dollar last week and fell below the major psychological level of 0.8000. Previous support has been seen around the 0.7900 level a few times in the fall of 2012 while further decline will likely see support at the 0.7850 level. Upward momentum will likely see resistance at the major 0.80 level and at the previous support and resistance level of 0.8050.



nzdusd-w5-31




This Week’s Economic Calendar highlights:

Monday, June 3

United States — ISM manufacturing
China — PMI
Australia — retail sales

Tuesday, June 4

Australia — interest rate decision
Australia — current-account
United States — US trade balance

Wednesday, June 5

Australia — GDP report
euro zone — GDP report
United States — ISM nonmanufacturing

Thursday, June 6

UK — Bank of England — interest rate decision
euro zone — European central bank — interest rate decision

Friday, June 7

United Kingdom — trade balance
Germany — trade balance
United States — nonfarm payrolls report
United States — unemployment rate
Canada — employment change and unemployment rate


See our full economic calendar for more events.




Written by Zac Storella, CountingPips Forex Blog & Currency Pair Technical Analysis

Large Trader & Speculator bullish US Dollar bets advanced to highest level since 2008

By CountingPips.com


cot-values



The weekly Commitments of Traders (COT) report, released on Friday by the Commodity Futures Trading Commission (CFTC), showed that large futures traders continued to add to their total bullish bets of the US dollar again last week. Total US dollar long positions have risen for four consecutive weeks and are at a new high level since 2008 when Reuters started calculating total amount of positions, according to Reuters.

Non-commercial large futures traders, including hedge funds and large International Monetary Market speculators, raised their overall US dollar long positions to a total of $43.77 billion as of Tuesday May 28th. This was an increase from the total long position of $41.0 billion registered on May 21st, according to position calculations by Reuters that derives this total by the amount of US dollar positions against the combined positions of euro, British pound, Japanese yen, Australian dollar, Canadian dollar and the Swiss franc.

What is the COT Report:

The weekly cot report summarizes the total trader positions for open contracts in the futures trading 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).

Individual Currencies Large Speculators Positions in Futures:

The individual currency speculator net positions saw advances for the British pound sterling and the Canadian dollar last week while the euro, Japanese yen, Swiss franc, New Zealand dollar, Australian dollar and the Mexican peso all had a declining number of net large trader contracts for the week.

 

Individual Currency Charts: (Please Click on Chart to Enlarge)


EuroFX:
eurofx

EuroFX: Large trader positions for the euro decreased last week and fell for a fourth consecutive week. Euro contracts declined to a total net position of -84,644 contracts in the data reported for May 28th following the previous week’s total of -80,949 net contracts on May 21st. Euro contracts are now at their lowest level since November 20, 2012 when contracts equaled -91,400.

Last Six Weeks of Large Trader Positions: EURO

Date Lg Trader Net Change
04/23/2013 -34275 -4511
04/30/2013 -30149 4126
05/07/2013 -33533 -3384
05/14/2013 -46921 -13388
05/21/2013 -80949 -34028
05/28/2013 -84644 -3695



British Pound Sterling:

gbp

GBP: British pound spec positions rose slightly last week after falling for three straight weeks and to the lowest level of 2013. British pound speculative positions edged higher last week to a total of -74,525 net contracts on May 28th following a total of to -76,976 contracts reported for May 21st.

Last Six Weeks of Large Trader Positions: Pound Sterling

date Lg Trader Net Change Weekly
04/23/2013 -60112 1863
04/30/2013 -58607 1505
05/07/2013 -63086 -4479
05/14/2013 -65355 -2269
05/21/2013 -76976 -11621
05/28/2013 -74525 2451



Japanese Yen:

jpy

JPY: Japanese yen net speculative contracts continued to fall last week for a fourth straight week and to the lowest overall position in 2013. Japanese yen positions decreased to a total of -99,769 net contracts on May 28th following a total of -95,186 net short contracts on May 21st.

Last Six Weeks of Large Trader Positions: Yen

date Lg Trader Net Change Weekly
04/23/2013 -79730 13681
04/30/2013 -71127 8603
05/07/2013 -78560 -7433
05/14/2013 -88407 -9847
05/21/2013 -95186 -6779
05/28/2013 -99769 -4583



Swiss Franc:

chf

CHF: Swiss franc large speculator positions declined for a third straight week last week and dropped to the lowest level of 2013. Net positions for the Swiss currency futures decreased to a total of -28,972 contracts on May 28th following a total of -19,930 net contracts reported for May 21st.

Last Six Weeks of Large Trader Positions: Franc

date Lg Trader Net Change Weekly
04/23/2013 1179 4432
04/30/2013 -8264 -9443
05/07/2013 -6235 2029
05/14/2013 -15410 -9175
05/21/2013 -19930 -4520
05/28/2013 -28972 -9042



Canadian Dollar:

cad

CAD: Canadian dollar positions improved last week for a sixth consecutive week after falling to a new low level for 2013 on April 16th. Canadian dollar positions improved slightly to a total of -33,359 contracts as of May 28th following a total of -33,852 net contracts that were reported for May 21st.

Last Six Weeks of Large Trader Positions: CAD

date Lg Trader Net Change Weekly
04/23/2013 -71679 4234
04/30/2013 -67848 3831
05/07/2013 -51916 15932
05/14/2013 -44417 7499
05/21/2013 -33852 10565
05/28/2013 -33359 493



Australian Dollar:

aud

AUD: Australian dollar large speculator positions continued to fall last week to decline for a ninth consecutive week. Aussie speculative futures positions dropped to a total net amount of -42,307 contracts on May 28th after totaling -32,409 net contracts as of May 21st. This is the third week of negative Aussie large spec contracts after having been in positive territory since June 26, 2012.

Last Six Weeks of Large Trader Positions: AUD

date Lg Trader Net Change Weekly
04/23/2013 31257 -21918
04/30/2013 30234 -1023
05/07/2013 6630 -23604
05/14/2013 -13450 -20080
05/21/2013 -32409 -18959
05/28/2013 -42307 -9898



New Zealand Dollar:

nzd

NZD: New Zealand dollar large speculator bets continued to decrease last week and fell for a fourth consecutive week. NZD contracts declined lower to a total of +14,011 net long contracts as of May 28th following a total of +17,782 net long contracts on May 21st.

Last Six Weeks of Large Trader Positions: NZD

date Lg Trader Net Change Weekly
04/23/2013 27705 -3103
04/30/2013 29050 1345
05/07/2013 28536 -514
05/14/2013 23216 -5320
05/21/2013 17782 -5434
05/28/2013 14011 -3771



Mexican Peso:

mxn

MXN: Mexican peso speculative contracts fell lower last week for a second consecutive week. Peso positions declined to a total of +120,864 net speculative positions as of May 28th following a total of +136,863 contracts that were reported for May 21st.

Last Six Weeks of Large Trader Positions: MXN

date Lg Trader Net Change Weekly
04/23/2013 146911 -4377
04/30/2013 138551 -8360
05/07/2013 138444 -107
05/14/2013 140319 1875
05/21/2013 136863 -3456
05/28/2013 120864 -15999

The Commitment of Traders report is published every Friday by the Commodity Futures Trading Commission (CFTC) and shows futures positions data that was reported as of the previous Tuesday (3 days behind).

Each currency contract is a quote for that currency directly against the U.S. dollar, a net short amount of contracts means that more speculators are betting that currency to fall against the dollar and a 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.)

See more information and explanation on the weekly COT report from the CFTC website.

 

Article by CountingPips.com