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FX option expiries for 26 April 10am New York cut

  
Analysis, Forex

A look at what is on the board for today

FX

FX
Not much on the board for today, with there being no significant ones. Even the board for the rest of the week seems a bit lackluster in terms of sizes (those near current spot levels at least) so just keep that in mind over the coming days.
There are some modest expiries for EUR/USD at around 1.2100 and some at 1.2140-50 on Wednesday but besides that, there isn’t much else to take note of for now.
It will be a big week in terms of headline risks with key releases, the FOMC and OPEC+ meetings, and big tech earnings releases adding to the mix. So, those might just be the more important factors dictating market sentiment in the days ahead.

CFTC commitment of traders: Mixed changes for currency positions

  
Analysis, Forex

Weekly forex futures positioning data for the CFTC for the week ending April 20, 2021

  • EUR long 81K vs 67K long last week. Longs increased by at 14 K
  • GBP long 25K vs 26K long last week. Longs decrease by 1K
  • JPY short 60K vs 58K short last week. Shorts increased by 2K
  • CHF short 2K vs 1K long last week. Shorts increased by 3K
  • AUD short 2K vs 4K long last week. Shorts increased by 6K.
  • NZD long 4K vs 3K long last week. Longs increased by 1K
  • CAD long 13K vs 2K long last week. Longs increased by 11K
  • Last weeks report
Highlights:
  • Both the CHF and AUD switched from net long to net short (long USD). They joined the JPY as currencies that are short vs long dollar positions
  • The EUR long had the largest increase with a gain of 14K
  • CAD longs increased as well BEFORE the Bank of Canada more hawkish rate decision on Wednesday.

Yen crosses are making it interesting. Three to watch.

  
Analysis, Forex

Yen softens, then comes back

EUR/JPY touched the highest today since 2018 in what looked like a breakout. The high was 130.97 but it ran into offers at 131.00 and has quickly dropped back to 130.41.
That’s left the chart looking like this:
EUR/JPY chart
Optimism in Europe is building and the real battle between these two is which economy will be the funder. Old habits die hard so the thinking is that Europe will eventually get on its feet at the end of the pandemic and (one day) escape ZIRP.
The bad news is that European cases are still climbing, particularly in France. The thinking though is that this will be the last wave as the virus is overwhelmed by vaccines in May/June when supplies are expected to jump.
It’s not just the EUR/JPY chart that’s interesting, NZD/JPY broke to a one-month high today but has now fallen back below the old high.
NZDJPY chart
On the flipside is CAD/JPY, which is flirting with a breakdown. The loonie is the laggard this week and the Bank of Canada decision is tomorrow, so this will be a chart to watch. This has been the trade of the year so far, but a break below the mid-March lows could signal a deeper correction.
cadjpy CHART

CFTC Commitments of Traders: Little changes in the futures net position data for the week

  
Analysis, Forex

Weekly forex futures positioning data for the CFTC for the week ending April 13, 2021

  • EUR long 67K vs 68K long last week. Longs trimmed by 1K
  • GBP long 26K vs 20K long last week. Longs increase by 6K
  • JPY short 58K vs 58K short last week. Unchanged.
  • CHF long 1K vs 3K long last week. Longs trimmed by 2K
  • AUD long 4K vs 4K long last week. Unchanged.
  • NZD long 3K vs 3K long last week. Unchanged
  • CAD long 2K vs 3K long last week. Longs trimmed by 1K
  • Last weeks report
Highlights:
  • Apart from a change in longs of 6K for the GBP, the other currencies had small unchanged to 2K changes in positions.
  • The EUR remains the largest net speculative position, with the JPY as the next largest.
  • The JPY is the only short position.
  • The CHF, AUD, NZD and CAD have modest net speculative positions of 1K to 4K.

Euro erases losses as the resilience continues

  
Analysis, Forex

Euro back above 1.19

Euro back above 1.19
No one seems to like the euro as it struggles with another covid wave and an inability to conclude a collective fiscal passage.
Yet someone is buying. EUR/USD has climbed to 1.19 from 1.17 at the start of the month. Today it dipped back to 1.1867 but has rebounded to unchanged. Barring a surprise in the next few hours, it will close near the highs of the week.
We’re a universe away from the old days of 1.60 and Gisele Bundchen wanting to be paid in euros but the negative sentiment and reality that eventually Europe will get the vaccine is a recipe for a contrarian trade.
There are also signs that the eurozone is coping with covid better than expected. The surprise index from Citi for the eurozone is currently the highest in the world at +150.

CFTC Commitments of Traders: EUR longs continue to get covered. JPY shorts remain steady

  
Analysis, Forex

Weekly forex futures positioning data for the CFTC for the week ending March 30, 2021

  • EUR long 68K vs 74K long last week. Longs trimmed by 6K
  • GBP long 20K vs 25K long last week. Longs trimmed by 5K
  • JPY short 58K vs 59K short last week. Shorts trimmed by 1K
  • CHF long 3K vs 4K long last week. Longs trimmed by 1K
  • AUD long 4K vs 12K long last week. Longs trimmed by 8K
  • NZD long 3K vs 4K long last week. Longs trimmed by 1K
  • CAD long 3K vs 7K long last week. Longs increased by 4K
Highlights:
  • All net positions trimmed
  • The new positions show long currencies, and short the USD with the exception of the JPY which shows short JPY and long the USD
  • The AUD long was trimmed the most (8k).
  • JPY, CHF and NZD only saw positions trimmed by 1K
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