Forex Flash: COT Gross longs cut - BBH

FXstreet.com (Barcelona) - Marc Chandler, Global Head of Currency Strategy at Brown Brothers Harriman has taken a look at the recent COT numbers and made a number of observations.

Firstly, he sees that the general pattern was for Gross longs to be cut, which was true for all the currency futures, save the Yen and AUD. He sees that gross shorts were mixed, but were smaller adjustments Further, he sees that there were three position adjustments of more than 10k contracts and these were the longs being cut in AUD and Yen, and the third was the increase in Euro longs. He feels that the increase in the net short Yen positions was largely a function of gross longs being cut, rather than the establishment of new shorts. He writes, “This fact cannot be appreciated if one simply looks at the net position, which is commonly done. The net short position is just shy of the extreme seen in mid-December. Then participation was smaller in that both gross longs and gross shorts were each almost 10k contracts smaller.” He finishes by commenting that speculators in the futures market remain bearish in CAD, while AUD bulls are moving to the sideline. He finishes by noting that gross longs have fallen by nearly a thirst (141k to 99k) since late March.