3 Feb 2014
Flash: Could bulls be set to capitulate? - BBH
FXstreet.com (Barcelona) - Marc Chandler, Global Head of Currency Strategy at Brown Brothers Harriman notes that after the net speculative positioning in the euro went short in the period ending Jan 21, for the first in nearly two months, it swung back to the long side in the most recent reporting period.
Key Quotes
“We fear it may be premature as the euro may be (finally) breaking to the downside. However, the reason the net speculative position shifted back to favour the longs had more to do with shorts being covered (10.5k contracts) than longs being added (7.6k contracts).”
“Except for the Mexican peso, the other currency futures all saw a reduction of gross short positions. Given the subsequent price action, this could be a sign of the capitulation of the bulls.”
Key Quotes
“We fear it may be premature as the euro may be (finally) breaking to the downside. However, the reason the net speculative position shifted back to favour the longs had more to do with shorts being covered (10.5k contracts) than longs being added (7.6k contracts).”
“Except for the Mexican peso, the other currency futures all saw a reduction of gross short positions. Given the subsequent price action, this could be a sign of the capitulation of the bulls.”