Latest CFTC Release Dated December 26th, 2006:
Implied Dollar Positioning Continues to Improve
Net Non-Commercial Positions
US Dollar Index: Implied dollar positioning has increased from 7 month lows in the last 3 weeks. Positioning is in the 29th percentile when measured against the last 52 weeks. Sentiment remains bearish (below the 50th percentile) but is improving. Improvement from extreme bearishness suggests that a dollar low may be close.
EUR Weekly
EUR: Euro positioning remains extreme at above the 75th percentile when measured against the last 52 weeks. However, net speculative longs decreased from 91,970 to 79,970. Again, sentiment remains bullish but the risk of a reversal is high due to extreme one sided sentiment.
GBP Weekly
GBP: The British Pound is in the exact same position as the euro. That is, positioning is in the 96th percentile when measured against the last 52 weeks. Positioning has decreased from the 100th to the 98th to the 96th percentile the last weeks bringing to the forefront the possibility of a reversal.
CHF Weekly
CHF: CHF net speculative positioning remains negative but is at the 71st percentile when measured against the last 52 weeks. This is a significant improvement in sentiment when compared to early Novemeber when positioning was at the 0 percentile. The CHF has strengthened against the dollar during that time from 1.2570. However, positioning has deteriorated since early December. On December 5th, speculators were net short 6,468 contracts but are now net short 12,285 contracts.
JPY Weekly
JPY: Yen positioning continues to worsen. Specualtors are net short 104,914 contracts now after being net short just 23,537 contracts on December 5th. Positioning, when measured against the last 52 weeks, is in the 12th percentile, which is extremely Yen bearish. Since positioning is deteriorating, we could see even more extreme Yen bearishness in the coming weeks.
CAD Weekly
CAD: Speculators continue to sell CAD. After flipping to net short on 10/17, specs have increased shorts to 66,294. Although positioning remains extreme at the 0 percentile, relief for CAD bulls does not come into the picture until positioning begins to improve (net shorts decrease).
AUD Weekly
AUD: Sentiment remains extreme as net positioning has lingered near 85,000 cotnracts for the last month. Net positioning did decrease from 88,900 to 85,035 this week but we would like to see a few weeks of AUD selling before suggesting that the AUD strength is limited.
