The latest CFTC report shows that there have been only minor changes in speculative FX positioning. This is a tad surprising, given the elevated volatility in recent weeks and the fact that the Dollar rally is not showing any signs of weakness yet.
Despite the concerns about Italy and bearish technical outlook, speculators remain heavily long the Euro. Net positioning stands at 110k, a decrease of only 5k compared to the previous week. 1.15 is the level to watch now - a clear break below is likely to force more Euro bulls to cover their positions.
GBP net positioning remained unchanged at 6k long - impressive as well, considering Cable has declined more than 1000 pips since April. While GBP/USD does appear oversold in the short-term, the currency pair is struggling to gain momentum and further losses could follow.
Meanwhile, the demand for safe havens such as the Japanese Yen and Swiss Franc is not really reflected in the CFTC report. JPY net positioning stands at 3k short (vs. 4k long previously). Speculators remain bearish on the Franc as well, with net positioning at 37k short (an increase of 1k).
Minor changes were seen in the commodity currencies:
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