Yen Sold Aggressively by Speculators

There was a 17% increase in the OI for the period as speculators aggressively sold the yen. The total number of short contracts increased from 100,116 contracts to 122,640. the heavy yen selling helped take the number of yen needed to buy a USD above the 104 handle. The inability of the pair to hold above the 104 level since the end of the period is probably resulting in some spec yen buying.

Excel Markets May 2014 Forex Demo Trading ContestThe net speculator position remain long the USD by 75,200 contracts. This is up from 69,322 in the prior week. The secind biggest USD long remains against the C$. The spec short is 49K but it is down from 76K last week. The liquidation of C$ short may be corresponding with a possible bottom in the Loonie above the 1.12 handle.

It looks like the huge short in the Australian Dollar is about all liquidated. From a high well above 80K contracts, the short is now down to 6.3K contracts. It might be possible the multi week rally in the A$ is over unless there is some compelling news to keep the buy orders coming.

• US Dollar Index: Small specs are long the DI by a 4.1 ratio while the large specs are on the short side. the total together puts the DI specs on the short side by 3.8K down from 5.3K last week. The total OI in this contract is only 52.7.

• Euro (EUR/USD): The large spec remains on the long side of the euro and the small spec has been short. Total long euro positions are down to 14.4 from 21.3 last week. Since the cut off for this report the euro has traded lower so the small player has been the winner. The option trade is now 8.2% of the total open.

• British Pound Sterling (GBP/USD): The OI continues to climb and is now up to 228K. Despite the large OI and the large spec long position, neither spec group is overloaded to the long sode. The total spec long did grow by a few thousand contracts and is up to 46K. It is curious the specs keep buying the pound when recent trade has taken place well beneath the highs.

• Japanese Yen (JPY/USD): There was a 17% surge in the OI as the specs flocked to the short side of the yen. Small specs are now a 3 ratio short and the large specs are a 5 to 1 short. The net short yen position went from 100K last week to 122.6K this week. The concentrated selling helped push the yen down 100 to 150 pips. There has been some recovery since the end of the period.

• Swiss Franc (CHF/USD): Specs have reduced their long position in the SF to 17.6 down from 20.7 last week. Since the cut off for this report the SF, like the euro, has sold off. Large specs remain a 2-to-1 long.

• Canadian Dollar (CAD/USD): The specs in the C$ have been carrying a big C$ short for quite some time. The was some position shuffling and the OI went down about 13K, but the total C$ spec short remained about the same at 49K contracts. Large specs are a 2.4 position short. Recently the option trade in the loonie has grown and spreading which is primarily options is 5.8% of the total market.

• New Zealand Dollar (NZD/USD): Small specs are a 2 ratio long and the large spec is a 3.5 to 1 long. Totally they are now long 20.8K in the small market where there is only 32K open. There was little change in positions this week.

• Australian Dollar (AUD/USD): The OI was up as specs bought the Aussie. Despite their buying, taking the total spec short down, the specs have yet to flip to the long side. Four weeks ago the spec short was 56K contracts, and this position is now down to only 6.3K short. Over 18K short positions in the A$ were closed in the period. The total OI climbed to 111K, up about 10% for the week.

Currency Commitments of Traders with Delta-adjusted Options and Futures Combined, data through April 1, 2014.