EUR futures OI dropped over the last one week, weak bulls shaken out of GBP

CME - Preliminary futures data for June 17th 


Currency Futures Total Open Interest (contracts) Change in Open interest (contracts)
AUD  118,527 4529
GBP 203,235 -1343
CAD  168,944 3,704
EUR 432,473 -3887
JPY 254,049 2,824
NZD  57,607 -749
CHF 38,854 424


EUR/USD price action - Bulls stand exhausted or switching to options?

The retreat to 5-DMA on Monday found takers, thus the spot recovered losses to end the day marginally higher at 1.1478. The spot extended gains to 13-1/2 month high of 1.1538 levels in the Asian session today. 

Last Tuesday’s bullish break above 1.1446 was accompanied by an addition of 4975 contracts in the Open Interest. Since then, the total OI has actually declined slightly from 436,899 to 432,473. Hence, one could be tempted to say that the 100-pip rally seen in the last one week (including today) may not be sustainable given the withdrawal of liquidity. However, as discussed here, the options data shows the rally could be sustainable. So the spot may witness a pullback, although, dips could be short lived as options activity remains in favor of further gains. 

GBP/USD - Weak hands have been crowded out

GBP/USD failed at 1.3113 - the resistance offered by the trend line sloping lower from the Aug 2015 high and May 2016 high - and closed the day on a weak note at 1.3052. The table above shows the open interest fell 1343 contracts. 

The spot bottomed out at 1.2812 last Wednesday before rising to 1.3113. Meanwhile, over the last one-week, the total open interest in the futures has jumped from 193,648 contracts to 203,235 contracts. This clearly shows, the rally is backed by surge in buying interest, while Monday’s decline in the OI largely represents the crowding out of the weak hands. 

AUD/USD - There is no stopping the AUD freight train

The 14-day RSI is overbought, but traders aren’t worried about it. The CME data shows the open interest rose by 4529 contracts on Monday taking the total to 18,527. A week ago the total open interest stood at 98,130. The futures activity clearly suggests there is no stopping the AUD freight train… The rise in the OI on Monday indicates the minor dip was utilized by traders to build fresh longs. No wonder, the currency pair has jumped above 0.79 handle today. 

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