Based on the Commitments of Traders data reported on: March 16th 2021
📊 In the Markets: This past week’s data came with something big… contract expiration's. We like contract expiration's because they usually give us a nice inside look at what the banks have planned with the currencies and this latest set of data did not let us down. What are we seeing?
First we have the #USDOLLAR and a large portion of their short positions were just closed during expiration's and when given the chance to open the same amount they previously had, they did not and instead opened only 2/3rds of what they previously held. So why is
this? We’ve been talking about how there was reason to believe that the #Dollar was going to head a little higher and it has to do with the location of the monthly supply. So when we see that the banks are reducing their shorts it is not that surprising if indeed price will start to rally some more. Then we have the #USDCAD and what we are seeing with #Oil and when you combine the two charts and what they are presenting, we have more evidence to suggest that the dollar will rally. (see report for details)
The #EURUSD has been taking profits on long positions the last few weeks and this leads us to believe that more downside is expected. Let’s not forget the #GBPUSD contacting major supply which is also pointing in the direction of weakness to come. We are also watching the #AUDUSD and the #NZDUSD but they haven’t signaled drops just yet but everything is looking like this is what is coming.
The one to watch closely will be the #USDJPY because it looks ready to fly high even after its recent rally. Take a look at the data and you’ll something very special. (read report for more info) Basically we have to be on watch for more upside to some because the banks are pulling a move the have done in the recent past and if the past is any indication then we should be watching for that move. This means a lot more upside on #JPY pairs is coming in the near future which is exactly what has been the conclusion of our analysis. We have already profited from the #JPY weakness and will be looking to continue that very soon.
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