Weekly COT report for G10


18 October, AtoZForex.com, London – As USD depreciation persists, the underlying FX sentiment continues to shift, yet, for how long? The following are the key takeaways from this week’s Scotiabank COT report for the G10.

COT report for G10

 

Sentiment$mns
13-OctBiasTrendPositionw/w chg.
EURBearishDecreasing-114611052
CADBearishNeutral-260482
AUDBearishDecreasing-2442485
JPYBearishDecreasing-1444386
GBPBearishIncreasing-717-286
CHFNeutralNeutral-307206
MNXNeutralNeutral-12433
NZDNeutralNeutral46110
GoldBullishIncreasing136943734
Total USD posn. (ex. Gold)19053-2068

Source: Scotiabank

Commentary and analysis

The change in the underlying sentiment is represented by consecutive aggregate long USD decrease from $2.1bn w/w to $19.1bn, the lowest level in the USD longs since late July 2014, when EURUSD traded at 1.35.

EUR sentiment, on the other hand, improved. However, the details highlight a build in the longs, notes Scotiabank, rather than a covering of the shorts. As a result, the newly build positions are left vulnerable to the late decline in spot.

“Bearish JPY sentiment narrowed modestly for a fourth consecutive week, with details suggesting a paring back of risk to both long and short positions, likely reflecting the range bound movement in spot,” the major bank argues. The net shorts of JPY are relatively narrow, at $1.44bn, close to the upper end of the 52 week range, Scotiabank added.

Gold remains on an uptrend. With a massive w/w rise of $3.7bn, the precious metal represents almost twice the increase of the USD w/w bearish change. As the dovishness of the Fed increase and rate hike expectation decrease, against such environment we could expect Gold to benefit.

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