Pound outperformed last week ahead of Fed, BoJ, BoE, and SNB this week, USD/CAD plummets on oil
Pound outperformed while the yen lagged last week, but risk-off event taking the yen higher today morning, and CAD’s energy underlying improves.
EUR/USD: ECB easing likely to keep pressure on the euro even if Fed reduces rates this week
Despite ECB easing, the euro managed to finish the week stronger against the greenback after briefly making fresh lows in the 1.09s. That aided retail longs significantly who managed to take profit on fresh longs and aid in pushing retail long bias 4% lower to a majority long 59% at the start of this week, while institutional bias is unchanged at a majority short 56% as both euro long and short positioning dropped by around 5K lots each. While that’s positive for its technical outlook with a positive DMI occurring on both the daily and weekly, it means far less with fundamental shifts occurring and will still need to break free of its bear trend channel on the weekly chart. ZEW figures aside tomorrow and Eurozone CPI on Wednesday, it’s the USD aspect of this pair that’ll be lively with this week’s big Fed event.
GBP/USD: Top performer on Friday, as well as top performer for the week
Last week was a serious change in fortunes for the pound, managing to not just outperform compared to the remaining FX majors on Friday, but also for the entire week, and making retail traders significant beneficiaries in the process who took profit on longs and pushed retail bias 7% lower to a majority long 62%. Institutional bias as of last Tuesday according to the latest CoT report showed them upping their short bias by 6.5K lots to an extreme short 77% and losing out big last week as a result. With more positive technical bias forming on the daily, the weekly’s outlook has turned more unknown whereby its price is below all its main long-term weekly moving averages but conforming to more volatile strategies ahead of this Thursday’s BoE event.
USD/JPY: Yen lagged the most last week while US rises on the back of stronger yields, but gaps higher this morning on risk-off
With US yields continuing to rise off the lows and a week that was relatively low on risks, the yen lagged the most last week amongst the FX majors. That was good news for retail traders who were 64% majority long at the beginning of last week and dropping 9% lower to 55% on primarily long profit-taking (at last). Institutional bias on the other hand, has risen significantly in favor of the yen thanks to a 5.5K lot reduction in yen shorts, and meaning they weren’t beneficiaries of last week’s yen weakness. As of this morning however and following a rise in geopolitical tensions, the flight to safety has risen, and with both aspects of this pair set to get effected by the US Federal Reserve’s decision and the Bank of Japan’s, its technical overview is set to get volatile this week.
USD/CAD: A shift in its technical overview following fundamental moves
The Canadian dollar lagged the most last Friday and was the second-worst performer last week after the yen, no surprise considering the drop in oil prices last week. However, this morning’s surge in oil prices following a rise in geopolitical tensions has certainly been a boon for the commodity currency’s energy underlying, and in the process the pair’s price has gapped back down. From a technical standpoint – and it means far less with recent events aiding the fundamentals – most of its indicators are still neutral and combined with a trending ADX. Retail bias is majority short at 60% with fresh shorts initiating on Friday (and taking profit as of today morning), while institutional bias is up 3% to a majority short 56% on an increase in CAD longs by 6.8K lots and an insignificant increase in short positions. Volatility in its underlying means volatile strategies may be more ideal.
AUD/USD: Short-term positive bias brushing up against a long-term bear trend channel
On the daily outlook, positive technical bias has been forming and most of its main technical indicators are flashing green. On the weekly outlook however, it hasn’t been able to break free of its bear trend channel and where its price is still below all its main weekly long-term moving averages. But retail longs aren’t complaining, with majority long bias dropping 8% on a combination of long profit-taking and range-trading shorts entering. On the institutional side, the bias is still heavy short albeit dropping as AUD long positioning rises by 2.9K lots and a simultaneous reduction in AUD shorts by 3.4K lots. The volatility in energy isn’t expanding to engulf the commodity currency given the bulk of its exports are in other hard commodities, but there will be significant items this week such as RBA minutes tomorrow and employment data on Thursday.
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