A snapshot view of money flow and notes to accompany the trading week ahead
US Dollar: Further reduction of USD bullish bets, with the removal of 9k contracts, saw open interest also lower. No noticeable short interest has occurred which paints a bullish bias. Price appears to be forming a Bullish Wedge with potential to stall above 93, before reversing and targeting the 98 highs. Final GDP on Wednesday leaves potential for bullish bets to return to the table if revised up from 0.2%.
USDCAD: Bearish move showing signs of exhaustion. Bullish Pinbar rejected 1.2125 suggests low has been seen.
USDJPY: Inverted Hammer on W1 shows signs of potential strength. D1 however appears to suggest further downside may on the cards, albeit at a slower rate. 122 is an important level for bulls to defend in the week/s ahead.
Australian Dollar: A quiet week for the Aussie calendar, so oversees events are more likely to drive the currency. COTS positioning shows that over 10k short contracts were removed by large speculators which pushed the net position from -14k to -4k net short.
AUS200: Price continues to advance within a bearish channel and with corrective price action (which requires another leg down).
AUDNZD: On the brink of breaking 1.13, having seen the likely multi-year low just 21 pips above parity and forming an aggresive V-Bottom formation.
AUDUSD: Gains from 0.76 lows appear to be corrective. Friday's Bearish Inside Day warns of near-term weakness below the Monthly pivot so will continue to monitor for signs of a top to form and losses resume.
British Pound: The Pound continues to shine after the economy has grown faster than originally estimated for Q1, seeing traders place bullish bets on an earlier rate rise from BoE. Notable trends can be seen on GBPAUD, GBPCAD, GBPJPY, GBPNZD and GBPUSD.
GBPAUD: Continues to favour buy-the-dip setups having broken above 2.0 with ease
GBPCAD: On brink of breaking above 2015 highs
Canadian Dollar: Another currency with a quiet calendar this week, so will look oversees for any directional moves. With no significant changes by large speculators I'll await forther clues before seeking a return to the dominant bearish trend on W1.
Euro: Greece, Greece Greece. Again, this is the big talking point for the Eurozone as we enter yet another week of negotiations and likely dead-end results. Bulls added 30k long contracts and bears removed 18.5 contracts, resulting in the Net Positioning indicator to be at its highest since July '14, at -89k contracts.
EURUSD: Stalled below 2015 and seeking bearish setups
EURNZD: Broke to a 16-month high and favours buy-the-dip setups
New Zealand Dollar: NZDJPY has been one of the better shorts of late but as it approaches the 2015 lows there is a risk of a bounce higher. The previous two weeks have seen losses in excess of 2% and, interestingly, the last time we saw two consecutive weeks depreciate in excess of 2% it bounced higher aggressively, back at the Feb '15 lows.
I had expected NZDUSD to begin building a base as momentum has been lost since RBNZ cut rates. However if we do see a bounce higher I would prefer to be patient and seeking areas of weakness to sell into.