Author: FX_Trdr

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By CountingPips.com

The US dollar’s strength had been cooling off for a few weeks and then sharply crystallized last week as the American currency dropped against the euro, British pound sterling, Japanese yen, Swiss franc and the Canadian dollar. The Australian dollar and the New Zealand dollar continued to take it on the chin in the forex markets as these currencies saw more of the same last week in their steep decline.

This week’s fundamental outlook is highlighted by Japan’s monetary policy and interest rate decision on Tuesday which could provide ammunition to the already volatile Japanese yen pairs. Also on the docket for this week is the New Zealand interest rate decision on Wednesday, Australian employment report and US retail sales on Thursday, then Eurozone consumer prices as well as more data out of the United States coming on Friday. See our latest currency pair commentary & major economic highlights below.

Major Currency Pair Commentary:

EUR/USD: The euro rose higher against the US dollar last week for a third consecutive week and touched above the 1.3300 level for the first time since February 25th. Look for near-term support in the range of 1.3175 — 1.3200 area with overhead resistance coming in at the major level of 1.3250.

GBP/USD: The British pound also surged last week against the US dollar and rose for a second consecutive week. The pair touched the highest level since the middle of February and has increased by over 500 pips from it’s low point of two weeks ago. Look for near-term support at the 1.5500 level with further support to be found around the 1.500 area. The 1.5600 — 1.5650 area looks to be a level of overhead resistance.

USD/JPY: The dollar fell sharply last week against the Japanese yen and decreased for a third consecutive week. Last week’s volatile ride saw this pair touch below the 95.00 level and then close all the way up above 97.50. The 97.50 level presents near-term support with the 96.50 to the 97.00 area supporting below. Upward momentum this week could see the 100.00 level act as significant resistance.

USD/CHF: The US dollar lost ground against the Swiss franc for a third consecutive week last week. The pair had a volatile week with the low point reaching under the 0.9225 level and a high point roughly 400 pips higher above 0.9620. This week’s levels look to be 0.9250 as a major support level that may be tested while on upside momentum we look for a 0.9380 — 0.9400 area to see first resistance. Further momentum higher up would likely see 0.9450 area come into play also as resistance.

USD/CAD: The US dollar cooled off against the Canadian dollar last week and closed below the 1.0250 level. This pair has continued to range within this wedge pattern that looked to be a breakout only two weeks ago but then came last week’s correction. This week we look at the 1.0250 level as important overhead resistance with the 1.0175 — 1.0200 area potentially providing short-term support.

AUD/USD: The Australian dollar continued its strong decline against the US dollar and fell for a fifth straight week. This pair closed near the major 0.9500 level which will likely see this level act as support or resistance depending on the early momentum of the week. Potential support for this free-falling pair looks to possibly be around the 0.9365 — 0.9400 area that has acted as previous support and resistance a few times over the last 5 years. Upward momentum looks to be capped into the major 0.9650 level.

NZD/USD: The New Zealand dollar also continued its fall against the US dollar and looks headed towards the 0.7750 level which it hasn’t touched in approximately a year. This pair will see an important pivot level around the 0.7850 level with overhead resistance at the 0.7900 major level. Lower levels for support are 0.7800 and the 0.7750 level.

This Week’s Economic Calendar highlights:

Sunday, June 9

Japan — gross domestic product

Monday, June 10

Switzerland — unemployment rate
Switzerland — retail sales data
Canada — housing starts

Tuesday, June 11

Japan — monetary policy statement and interest rate decision
United Kingdom — NIESR GDP estimate

Wednesday, June 12

New Zealand — interest rate decision
United Kingdom — employment data

Thursday, June 13

Australia — May employment data
Switzerland — producer price data
United States — retail sales data
Japan — Bank of Japan minutes
United States — weekly jobless claims

Friday, June 14

Euro zone — consumer price index
euro zone — employment data
United States — University of Michigan confidence survey
United States — current account
United States — producer price index

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 decreased their total bullish bets of the US dollar last week for the first time since April. Prior to last week, total US dollar long positions had increased for four consecutive weeks and to a new highest level since 2008 when Reuters started calculating the total $ amount of positions, according to Reuters.

Non-commercial large futures traders, including hedge funds and large International Monetary Market speculators, trimmed their overall US dollar long positions to a total of $39.12 billion as of Tuesday June 4th. This was a decline from the total long position of $43.77 Billion registered on May 28th, 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 euro, Japanese yen and the Swiss franc last week while the British pound sterling, Canadian dollar, 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 improved last week after falling for four consecutive weeks. Euro contracts gained to a total net position of -51,621 contracts in the data reported for June 4th following the previous week’s total of -84,644 net contracts on May 28th.

Last Six Weeks of Large Trader Positions: EURO

British Pound Sterling:

GBP: British pound spec positions fell slightly last week after rising slightly the previous week. British pound speculative positions edged lower last week to a total of -77,738 net contracts on June 4th following a total of to -74,525 contracts reported for May 28th. This is the lowest level for British pound sterling contracts in 2013.

Last Six Weeks of Large Trader Positions: Pound Sterling

Japanese Yen:

JPY: Japanese yen net speculative contracts improved sharply last week after falling for four straight weeks and to the lowest overall position in 2013. Japanese yen positions improved to a total of -82,744 net contracts on June 4th following a total of -99,769 net short contracts on May 28th.

Last Six Weeks of Large Trader Positions: Yen

Swiss Franc:

CHF: Swiss franc large speculator positions improved last week after declining for three straight weeks and falling to the lowest level of 2013. Net positions for the Swiss currency futures improved to a total of -25,803 contracts on June 4th following a total of -28,972 net contracts reported for May 28th.

Last Six Weeks of Large Trader Positions: Franc

Canadian Dollar:

CAD:  Canadian dollar positions decreased last week after improving for six consecutive weeks. Canadian dollar positions fell to a total of -39,776 contracts as of June 4th following a total of -33,359 net contracts that were reported for May 28th.

Last Six Weeks of Large Trader Positions: CAD

Australian Dollar:

AUD:  Australian dollar large speculator positions declined again last week to fall for a 10th consecutive week. Aussie speculative futures positions decreased to a total net amount of -58,550 contracts on June 4th after totaling -42,307 net contracts as of May 28th. This is the fourth 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

New Zealand Dollar:

NZD: New Zealand dollar large speculator bets decreased once again last week and declined for a fifth consecutive week. NZD contracts fell lower to a total of +6,013 net long contracts as of June 4th following a total of +14,011 net long contracts on May 28th. This is the lowest level for New Zealand Kiwi positions since July 10, 2012.

Last Six Weeks of Large Trader Positions: NZD

Mexican Peso:

MXN: Mexican peso speculative contracts fell sharply lower last week and declined for a third consecutive week. Peso positions fell to a total of +82,871 net speculative positions as of June 4th following a total of +120,864 contracts that were reported for May 28th. This is the lowest level for Mexican peso positions since August 7, 2012 when contracts equaled +69,378.

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

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