• Following the sharp fall to 71,227 from 79,726, USD longs increased modestly to 73,143 in the week ending March 31. This is still well below the year-to-date high at 81,270 set in the first week of March before positive bets on the USD were trimmed on the back of a far less hawkish and in fact dovish Fed (recently published March non-farm payrolls also dented market expectations for a hike as soon as in June). It is also worth pointing out that the value of USD’s net long position fell to USD 40.4bn from USD 43.9bn in the previous week.
  • At the same time sentiment towards the euro remains overwhelmingly bearish with EUR shorts surging to 227,000 – a record high since 1999. The full-scale QE announced by the ECB earlier this year continues to weigh on the euro, especially against the US dollar.
  • After increasing for four consecutive weeks, GBP shorts edged marginally lower to 36,630 from 38,557 previously. While this is the least bearish stance since March 10, the upcoming general elections scheduled on May 7 pose a major risk to the pound.
  • Net JPY shorts fell further from 45,905 to their lowest since October 23, 2012 of just 23,924. Given that the BoJ might inject even more stimulus, sustainable JPY recovery seems unlikely.
  • AUD net shorts edged lower to 24,356 from 28,368, but prospects of an interest rate cut by the RBA will continue to weigh on the AUD.
  • Elsewhere, CADs shorts still held fairly steady at 29,618 with CHF net positions turned positive again, but only just at 706.

The material has been provided by InstaForex Company – www.instaforex.com