CFTC Position Watch - USD demand picks up, but EUR longs remain at elevated levels

The latest positioning report from the CFTC showed that large speculators were forced to cut their USD short positions further. While market participants do not seem to believe in the sustainability of the Dollar rally, it has become difficult for USD bears to hold their positions as the Euro has tumbled back below 1.17 and USD/JPY had a jump above 110.

EUR net positioning has decreased from 120k to 115k long. Given the large decline in the Euro, positioning remains at an elevated level. However, considering the poor economic data out of the Euro Zone in recent weeks and concerns around Italy, it will get increasingly difficult for EUR bulls to remain optimistic.

Meanwhile, GBP net positioning fell from 9k to 6k long.

JPY net positioning turned from short to long, and currently stands at 4k (vs. -5k previously). This shows that speculators are anticipating a risk-off environment in the short-term, despite the improvement in market sentiment last week, along with the break above 110 in USD/JPY.

In the commodity currencies, there were some notable changes as well:

• AUD short positioning increased by 6k to 23k net short
• CAD positioning remain unchanged at 24k net short
• NZD net positioning stood at 2k long, a decrease of 11k compared to the previous week

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