Forex futures net speculative positions as of the close of business on Tuesday July 11, 2017

  • EUR long 84K vs 77K long last week. Longs increased by 7K
  • GBP short 24K vs 28K short last week. Shorts trimmed by 4K.
  • JPY short 112K vs 75K short last week. Shorts increased by 37K
  • CHF short 0K vs 0K short last week. No change
  • CAD short 9K vs 39K short. Shorts trimmed by 30K.
  • AUD long 37k vs 32k last week. Longs increased by 5K.
  • NZD long 32K vs 29K long last week. Longs increased by 3K

The weekly speculative positions from the CFTC shows that the CAD shorts were trimmed by 30K contracts in the current week. That cut took the net position to short -8.604 contracts, nearly square.

The CAD shorts reached a record short position of -99,109 contracts on May 23rd. The CADUSD closed at 0.7401 that week. Since then, the CADUSD has rallied to 0.7903. As the CAD moved higher and higher, the shorts got squeezed and squeezed some more. ALthough there still are a net -8604 shorts left, the vast majority of the losing position is now closed. The trade will go down as one of the worst chapters in spec history.

In other highlights this week:

  • The shorts in the JPY have increased to it's highest level since June 2015. The net short is 112k vs 75k last week. That is a hefty increase of 37K.
  • The EUR long position increased by 7K to 84K from 77 long last week. That is the largest long position since May 2011. The good news for the speculators, is the EURUSD is trading near the highest levels since May 2016. Traders have profited from the currencies rise. They needed the profit to cover the losses in the CAD.

Large speculative positions that are in the money can put a lid on advances in a currency. Why? Everyone is already long. You need buyers overwhelming sellers to push the price higher.

In addition, if the price does start to move lower (in the case of the EURUSD), there can be an adverse reaction in the opposite direction if traders who are long, look to all exit at the same time (i.e. sell). So be aware for both the EUR (and the JPY) of this dynamic in trading next week.