As of Tuesday 13th August:

  • Traders were net-long USD by $12.3bn overall, and $16.6bn against G10 currencies
  • Large speculators are their most bullish on the Japanese yen since November 2016
  • The yen also saw the largest weekly change among FX majors, with traders adding +14.2k contracts to their net-long exposure
  • Among the 11 currencies we follow (including DXY), only 2 saw an increase in volumes for the week; NZD and BRL


USD: Despite relatively low demand for the greenback, the US Dollar Index (DXY) saw its highest weekly close since March 2017. Still, the stat is better than the reality of the situation. DXY is heavily weighed to the Euro (57%) which is the weakest major this past month, so the dollar is more attractive on a relative basis which is helping to prop up DXY. The main takeaway from the chart above is that investors remains wary of the dollar, yet remain net long overall, albeit at their lowest levels in around a year.


JPY: The surge of yen strength doesn’t come as too much of a surprise, given the intensified fears of a global recession, dovish central banks and ongoing trade wars. Moreover, it’s been seen with a rise of freshly initiated longs and covered shorts.  The long/short ratio has spiked to 1.92 and is reminiscent of the spike seen from February 2016 when investors were also fretting about a potential global recession. The 1-year Z-score is above +2 standard deviations (SD) which warns of over-extension, although given the shift in sentiment we’re inclined to use the 3-year Z-score which sits at just +0.98 SD. So, until a lift in global sentiment is seen, we’d prefer to stick with Yen strength in terms of trade setups.



GBP: Traders reduced short exposure for the first time in 9 weeks, and several indications have been pointing towards a sentiment extreme. Gross short exposure had reached levels not seen since February 2017 and August 2018, the 1 and 3-year Z-scores were less than -2 SD last week and long/short ratio is its lowest in 16 months. Still, whilst positioning continues to look stretched, it remains difficult to be bullish on GBP with so much headline risk weighing it down, barring a reversal of Brexit fortunes. So perhaps the indications warn against being short, as opposed to bucking the trend at present, even if GBP enjoyed its most bullish session in a month on Friday.


As of Tuesday 13th August:

  • Gold traders reduced long exposure by a mere -2.5k contracts (or -0.6% of total) from arguably, stubborn highs
  • Silver traders reduced long exposure by -10.6k contracts (or -6.8% of total)
  • Of the 9 commodity markets we follow, only platinum and WTI saw an increase in volumes for the week.



Gold: Ultimately, we remain firmly bullish on gold but at some point its likely due some mean reversion. Both 1 and 3-year Z-scores are over +2 SD (1-year has been above it for 10 weeks) and the long/short ratio is 6.2, its highest level since December 2012. Both longs and shorts reduced exposure last week (-4.3k and -1.9k respectively) which saw net-long exposure fall by -2.5k contracts. Yet whilst gold screams a sentiment extreme, investors appear reluctant to let go of their bullish exposure, so perhaps mean reversion could result in sideways trading before the trend resumes.

CFD and forex trading are leveraged products and can result in losses that exceed your deposits. They may not be suitable for everyone. Ensure you fully understand the risks. From time to time, City Index Limited’s (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material. As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed

Analysis feed

Latest Forex Analysis

Editors’ Picks

EUR/USD rebounds after dismal US PMIs

EUR/USD is trading closer to 1.0850, rising in response to weak US PMIs, with the services one pointing to contraction. Earlier, German Manufacturing PMI beat estimates. 


GBP/USD advances to 1.2950 after US data

GBP/USD is trading around 1.2950, taking advantage of US weakness stemming from a downfall in Markit's Services PMI in the US. In Britain, the Manufacturing PMI exceeded estimates. 


Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Consolidation process underway

The Crypto board continues to be immersed in an emotional leg-breaking, consistently punishing the emotional state of the traders with its continuous changes of direction.

Read more

XAU/USD unstoppable, breaks to fresh 2020 highs, approaching $1650/oz

XAU/USD is trading in an uptrend above its main daily simple moving averages (SMAs) while breaking above a bull channel. Gold is printing fresh 2020 highs hitting $1646.64 per ounce on an intraday basis.  

Gold News

FXStreet launches Real-Time Trading Signals

FXStreet Signals offers access to explanatory live webinars, real-time notifications when signals are triggered and exclusive membership to the company’s Telegram group, where users get direct guidance by our analysts and get room to discuss and interact.

More info

Forex Majors