Author: FX_Trdr

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By CountingPips.com

The US dollar fell sharply across the board against the other major currencies last week in the forex trading action. The American currency continued to decline for a fourth straight week against the euro, the Swiss franc and the Japanese yen while falling against the British pound sterling for a third week. Against the commodity currencies, the the US dollar declined against the Canadian dollar for a second straight week while the Australian and the New Zealand dollars finally staged a rebound from their five-week bearish trends and recorded weekly increases.

Major Currency Pair Commentary:

EUR/USD: The euro gained against the US dollar for a fourth straight week last week and touched a high of approximately 1.3390 on Thursday. More upward momentum could setup a test of the major 1.3500 level this week. Important levels to watch for this pair this week start with the 1.3300 price level which will be an important support level for the bulls to keep price above in order to push this pair higher. Below the 1.3300, we could see potential support come in at the 1.3265 — 1.3250 area that has been a recent area of support and resistance and then the 1.3200 major level will come into play. If we see further upside momentum, price will have to get through the 1.3400 — 1.3380 area before we test the 1.3500 major level which is likely to attract traders attention and possibly heavy selling action.

GBP/USD: The British pound, similar to the euro, has really pushed higher in the last two weeks and just about reached the 1.5750 level for the first time since early February. The pair currently trades right at the 1.5700 major level which could likely provide support or resistance to begin the week. Downward momentum would bring up the 1.5600 level for support followed by the 1.5500 — 1.5520 area. Further upward price action possibly runs into 1.5750 resistance followed by overhead resistance at the 1.5875 — 1.5900 area.

USD/JPY: The Japanese yen gained against the dollar for a fourth straight week and really surged over the last two weeks. The pair now currently trades under the major level of 95.00 and sets up a potential reunion with the 92.50 major level that has been visited a few times already in 2013. The 95 level sets up as potentially the most important level of the week as a cross above this level will potentially signal the downtrend is losing steam while prices remaining below this level signals the trend has more room to run. More downward action would run into the 92.60 — 92.50 support area followed by more support at 91.00 — 91.25 area. Bullish price action would have to overcome the resistance of the 94.40 — 94.50 area and then the previously mentioned 95.00 major psychological level.

USD/CHF: The Swissy gained against the US dollar for a fourth week and has gone from the highs above the 0.9800 price to trading currently below 0.9250 in that time span. The pair currently trades right around the major 0.9200 level which will likely set up as either support or resistance to begin the week. Further downward momentum in this pair would likely see support coming in at the 0.9150 level with the 0.9100 level being, perhaps, the more important support for the week. The 0.9100 level has provided strong support earlier in 2013, in late 2012 and also earlier in 2012. If the dollar staged a comeback this week, we potentially see resistance into the 0.9250 level followed by the 0.9330 — 0.9350 area.

USD/CAD: The US dollar uptrend against the Canadian loonie has cooled off after touching the highest level in almost a year near the end of May above the 1.0400 level. The USD/CAD pair has fallen for two straight weeks and continues to trade back within the wedge pattern that looks to be decided in the coming weeks. The pair currently trades right near the 1.0150 level with overhead resistance to be found near the 1.0180 — 1.0200 area and to be followed by the 1.0250 resistance area. Further decline will likely see support seeing at the 1.0100 — 1.0120 area followed by the major psychological level of 1.0000.

AUD/USD: The Aussie rebounded last week after falling for five straight weeks and trades above the 0.9500 level. The 0.9650 level shapes up as a very important level for the week as whether prices trade above or below this level may determine whether the Bulls can stage a further rebound or if the Bears punish this currency lower. This level has provided key support over the past few years for this pair and also was a major resistance level that prices bounced off of during the downtrend in 2008. Upward momentum for the AUD/USD will potentially run into last week’s resistance just above the 0.9650 area while downward support may be found at the 0.9350 level and then the 0.9275 — 0.9250 area.

NZD/USD: The New Zealand dollar rebounded sharply last week and made it back to close over the 0.800 psychological level. Further upward momentum will run into overhead resistance at the 0.8050 level. Next up the line would be the 0.8100 area followed by the 0.8180 — 0.8200 area. Bearish momentum on the week will likely see a retest of the 0.8000 major level with further support being potentially found at the 0.7930 — 0.7900 area.

This Week’s Economic Calendar highlights:

Monday, June 17

Canada — existing home sales

Tuesday, June 18

Australia — reserve bank meeting minutes
United Kingdom — producer price index
United Kingdom — consumer price index
United Kingdom — retail price index
euro zone — German ZEW report
United States — consumer price index
United States — housing starts and building permits
Japan — trade balance

Wednesday, June 19

Switzerland — ZEW survey report
United Kingdom — bank of England minutes
United States — F0MC interest rate decision
New Zealand — GDP report

Thursday, June 20

Switzerland — interest rate decision
Switzerland — trade balance report
China — HSBC manufacturing PMI
Japan — leading index/coincident index
euro zone — purchasing managers indexes
United States — weekly jobless claims
United States — Philadelphia Fed reserve survey
United States — leading indicators
United States — existing home sales

Friday, June 21

Canada — consumer price index
Canada — BOC consumer price report
Canada — monthly retail sales

See our full economic calendar for more events.

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

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By CountingPips.com

The weekly Commitments of Traders (COT) report, released on Friday by the Commodity Futures Trading Commission (CFTC), showed that large futures traders sharply cut their total bullish bets of the US dollar last week and decreased their holdings for a second consecutive week.

Non-commercial large futures traders, including hedge funds and large International Monetary Market speculators, pulled back on their overall US dollar long positions to a total of $28.28 billion as of Tuesday June 11th. This was a decrease from a total long position of $39.12 Billion registered on June 4th, 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.

On May 28th, US dollar long positions reached their highest level on record (Reuters data) with a total of $43.77 billion before retreating.

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 euro, British pound sterling, Japanese yen, Canadian dollar and the Swiss franc last week while the 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:

EuroFX:

EuroFX: Large trader positions for the euro surged sharply last week and improved for a second consecutive week. Euro contracts jumped to a total net position of -7,533 contracts in the data reported for June 11th following the previous week’s total of -51,621 net contracts on June 4th. This is the best level for euro positions since February 19th when euro positions were a +19,103.

Last Six Weeks of Large Trader Positions: EURO

British Pound Sterling:

GBP: British pound spec positions also improved sharply last week after declining slightly the previous week. British pound speculative positions advanced to a total of -53,687 net contracts on June 11th following a total of -77,738 contracts reported for June 4th. The increase on June 11th brings the British pound sterling contracts off of the lowest level for 2013 reached on June 4th.

Last Six Weeks of Large Trader Positions: Pound Sterling

Japanese Yen:

JPY: Japanese yen net speculative contracts improved last week for a second consecutive week after falling to the lowest overall position in 2013 on May 28th. Japanese yen positions improved to a total of -72,906 net contracts on June 11th following a total of -82,744 net short contracts on June 4th.

Last Six Weeks of Large Trader Positions: Yen

Swiss Franc:

CHF: Swiss franc large speculator positions improved last week for a second consecutive week.  Net positions for the Swiss currency futures improved to a total of -20,738 contracts on June 11th following a total of -25,803 net contracts reported for June 4th. Swiss franc large speculator positions have gone higher for two straight weeks after falling to the lowest level of 2013 on May 28th.

Last Six Weeks of Large Trader Positions: Franc

Canadian Dollar:

CAD: Canadian dollar positions improved last week after declining the previous week. Canadian dollar positions advanced to a total of -35,907 contracts as of June 11th following a total of -39,776 net contracts that were reported for June 4th. Before a decline on June 4th, Canadian dollar large spec positions had improved for six consecutive weeks.

Last Six Weeks of Large Trader Positions: CAD

Australian Dollar:

AUD: Australian dollar large speculator positions continued to decrease last week and fell for the 11th straightweek. Aussie speculative futures positions dropped to a total net amount of -63,277 contracts on June 11th after totaling -58,550 net contracts as of June 4th. This is the fifth week of bearish Aussie large spec contracts after having been in positive territory since June 26, 2012 and the fall has coincided with the steep drop in the AUD/USD currency pair.

Last Six Weeks of Large Trader Positions: AUD

New Zealand Dollar:

NZD: New Zealand dollar large speculator bets fell once again last week and decreased for a sixth consecutive week. NZD contracts declined lower to a total of +2,653 net long contracts as of June 11th following a total of +6,013 net long contracts on June 4th.

Last Six Weeks of Large Trader Positions: NZD

Mexican Peso:

MXN: Mexican peso speculative contracts fell sharply lower again last week and declined for a fourth consecutive week. Peso positions dropped to a total of +63,774 net speculative positions as of June 11th following a total of +82,871 contracts that were reported for June 4th. This is the lowest level for Mexican peso positions since July 31, 2012 when contracts equaled +47,556.

Last Six Weeks of Large Trader Positions: MXN

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