Latest CFTC Release Dated January 16th , 2007:
US Dollar Bullish Sentiment Confirmed
Note:
The charts used to interpret the Commitment of Traders data now include both net positioning and the percentile indicator. The percentile indicator value is the current net positioning as a percentile when measured against the last 52 weeks. A 4 week moving average is applied to that number in order to smooth out the data. A reading above 90 indicates extreme bullishness and a reading below 0 extreme bearishness. A decrease in longs when the indicator is in extremely bullish territory indicates reversal potential as does a decrease in shorts when the indicator is in extremely bearish territory. The percentile indicator is plotted above net positioning.
US Dollar Index: Implied dollar positioning decreased slightly from 64,917 to 54,745 but the trend remains towards dollar buying as implied positioning is positive for the second week in a row. The percentile indicator is at 71, which is suggestive of a strong bull market.
EUR: Euro positioning decreased for the 6th week in a row. The speculative community remains long 53,542 contracts. The percentile indicator continues to decrease and is now at 69. The percentile indicator decreased from above 90 last week, which indicates a reversal from extreme bullish sentiment.
GBP: The British Pound held up much better than the euro. Traders increased longs this week from 58,653 to 84,318. The percentile indicator did decrease last week from above 90, indicating reversal potential. That potential still exists as the large number of longs in the market leaves bulls vulnerable.
CHF: CHF net speculative positioning remains negative as speculators continue to pile on shorts. Shorts increased this week from 40,371 to 42, 248. The percentile indicator is in bearish territory now (below 50). Sentiment is not yet extreme, which suggests that the CHF downtrend could extend for some time.
JPY: Yen positioning continues to worsen. Speculators increased shorts for the 6th week in a row to set a new record for speculative short contracts. Positioning is extreme (JPY bearish) as indicated by the percentile indicator, which is at 0. Only an improvement in positioning would begin to signal the possibility of a turn in the JPY.
CAD: CAD positioning actually improved for the time since the beginning of December. Sentiment is extremely CAD bearish as the percentile indicator is below 0. The improvement is sentiment this week could be the beginning of a bottoming in CAD sentiment and thus price (topping out in USDCAD).
AUD: Traders increased longs last week following the prior weeks sell-off. The percentile indicator did decrease below 90 this week but was not accompanied with a decrease in net longs. The increase in longs gives scope to a continuation of the uptrend.
