Commercial Traders Positioned for Swiss Franc RallY

On balance, commercial forex traders are positioned for US dollar weakness.

US Dollar Index: The composite COT has dropped from high levels and the commercial % bullish is increasing from below 20%, which is bullish. Circles on the chart indicate previous instances when commercials were less than 20% bullish. This is a bearish signal.

Implications: bearish

EUR: Composite COT has turned up from historically low levels and the % of commercials that are bullish was recently at its highest level ever. The previous highs were back in late 2005 at significant EURUSD bottoms.


GBP: The interpretation of the British Pound COT numbers are the exact same as the interpretation of the COT numbers for the Euro.

Implications: bullish

CHF: The 52 week index has turned up from 0, which warns of a bottom (USDCHF top). The CHF should gain.

Implications: bullish (USDCHF bearish)

JPY: Bottoms in the USDJPY occur when speculators are extremely long the JPY (short USDJPY), which is not yet the case. Positioning is getting closer to extreme but is not at the level that is considered extreme. Continue to favor Yen strength.

Implications: bullish
CAD: CAD positoning is neutral. The Composite COT is near 0, which tells us little regarding sentiment.

Implications: neutral


AUD: Composite COT was recently at a level that previously indicated an important low (March 2006). This combined with the turn up from 0 in the 52 week index favors strength.

Implications: bullish



NZD: The NZD index has turned from 0. Speculators were recently net short the largest amount of NZD on record (the record only goes back a few years though). These are bullish signals.
Implications: bullish

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