Weekly G10 COT report

25 October, AtoZForex.com, London – Highlighting the increasingly weakening USD rally, Scotiabank analysts have shared the latest key takeaways from the weekly G10 COT report.

Weekly G10 COT report

Sentiment $mns
23-Oct Bias Trend Position w/w chg.
EUR Bearish Decreasing -8873 2588
AUD Bearish Increasing -2789 -347
CAD Bearish Decreasing -2089 515
JPY Neutral Neutral -380 1064
MNX Neutral Neutral -19 106
CHF Neutral Neutral 82 389
NZD Neutral Neutral 254 208
GBP Bullish Increasing 728 1445
Gold Bullish Increasing 17794 4100
Total USD posn. (ex. Gold) 13086 -5967

Source: Scotiabank

Decreasing USD longs

“This week’s changes in G4 positioning hint to a capitulation in bearish sentiment toward GBP and JPY alongside sizeable moderation in bearish sentiment toward EUR,” begins Scotiabank.

The combined positioning shift among G4 currencies drove most of the fall in the net USD longs —decreasing by $6.0bn w/w to $13.1bn, and continuing to reach its lowest levels since July 2014.

EUR and short positionings

EUR, on the other hand, remains the largest held aggregate short position at $8.9bn, followed by AUD and CAD amounting to $2.8bn and $2.1bn respectively. Market’s sentiment for JPY, CHF, MXN, and NZD is neutral, but investors are modestly bullish on GBP.

“The bearish EUR position has narrowed a remarkable $21.5bn off the multi-year -$30.4bn low from late March, with early short covering followed by several months of tentatively built longs,” the major bank points.

Decreasing EUR shorts

The week’s $2.6bn EUR shorts’ narrowing was the largest since the turbulence in mid-August. Investors have pared $1.9bn in shorts and additionally built $0.7bn in longs, “the latter most vulnerable to reversal on the subsequent declines in spot,” Scotiabank pointed.

Also, bearish sentiment for CAD has softened further, decreasing by $0.5bn w/w to levels since late June. The mains of improving CAD sentiment continue to be the short covering, the bank added, with longs relatively unchanged over the past year.

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