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Weekly Forex Technicals |
Written by Danske Bank |
Jan 30 12 10:09 GMT
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IMM Positioning
USD longs extended further before FOMC announcement
The latest IMM data cover the week from 17-24 January.
USD longs extended before FOMC meeting: The latest IMM data, which cover the week ending last Tuesday, show a further build-up in aggregate USD longs ahead of Wednesday's FOMC announcement, reaching USD18.8bn. The unwinding of USD longs may thus explain the sharp USD sell-off in the wake of the surprisingly dovish statement. Short EUR positions also set a fresh record, and while some shorts are likely to have been washed out by the recent rise in EUR/USD, positioning likely still leaves directional risks to the upside.
'Aussie' longs getting crowded: The build-up in AUD longs has continued, climbing to 1 sigma above the mean for the first time since August. This indicates that long positioning in AUD is getting somewhat crowded. Hence, we increasingly prefer other pro-cyclical currencies to express a positive view on risk sentiment; for example, non-commercial investors are still short CAD and we see short positions in USD/CAD as an attractive vehicle for expressing a positive view on risk.
MXN positioning turning positive: Positioning in MXN has swung into positive territory for the first time since September. However, we see scope for further MXN longs to be accumulated as the peso converges towards its fair value
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Danske Bank
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