Takeaways From This Week's COT Report: USD Position Turn Bearish For 1st Time Since May '14

Data in this report cover up to Tuesday April 19 & were released Friday April 22. 

The aggregate USD position has fallen into bearish territory for the first time since May 2014 following this week’s $3.2bn swing to -$1.8bn Sentiment improved for all currencies with the exception of GBP, pushing bullish JPY sentiment (both gross long and net, in contract terms) to fresh record levels.

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Details suggest an important handover to the bulls (building) from the bears (covering) as longs drove the bulk of this week’s improvement in sentiment toward CAD, AUD, EUR and JPY.

The net long JPY position has climbed $0.6bn to $8.2bn. In contract terms, both the gross long and net positions are at record bullish levels. Details highlight the degree to which bulls have driven the most recent shift in sentiment, leaving JPY exceptionally vulnerable to a turn.

CAD sentiment has improved for a 12th consecutive week and the net long position has climbed $0.4bn to $0.6bn. CAD bulls (gross longs) appear increasingly confident, building their position for three of the past four weeks to levels last seen in late January. The relentless pattern of short covering in CAD continues. AUD sentiment continues to improve and bulls are driving the move.

The AUD net long position is up an impressive $0.8bn to $3.5bn and gross AUD longs have climbed to their highest level since April 2013.