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Euro Oversold As Shorts Surge To Highest Since June 2010

Tyler Durden's picture
Submitted by Tyler Durden on 09/16/2011 15:55 -0400



 

For those seeking an oversold security, look no further than the EUR, which in the week ended Sept. 13, was the biggest FX loser, as non-commercial exposure rose 50% to a net short of -54,459 from -36,443 contracts the week before. This is the most bearish net exposure in the EUR since June 2010, and positions the currency for a short squeeze, although if history is any guide it still has a ways to go: the 2010 trough was -114k net contracts hit in May of 2010, just after it became apparent that Europe is falling apart. Also, despite speculation that traders have left the safe-haven status of the CHF following last week's SNB intervention, the Swiss Franc retained its bullishness, with net exposure remaining long, although declining modestly from 7,549 to 5,493 contracts. Also not surprising is that bullish bets in the JPY rose from 32,787 to 34,955 after declining past week. It seems that Yoda will be watching, watching, watching his Bberg terminal very closely in the coming days.

Source: COT

 
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Fri, 09/16/2011 - 15:57 | 1678360 speconomist
speconomist's picture

Noda Yoda?

Fri, 09/16/2011 - 16:06 | 1678412 zorba THE GREEK
zorba THE GREEK's picture

Soon we will add the drachma to this graph.

Fri, 09/16/2011 - 16:08 | 1678419 GeneMarchbanks
GeneMarchbanks's picture

Yes along with many digits and decimal spaces.

*For your sake I hope you are a Greek residing in Sydney or some such shit.

Fri, 09/16/2011 - 17:03 | 1678608 Skid Marks
Skid Marks's picture

and the Ouzo

Fri, 09/16/2011 - 16:07 | 1678413 GeneMarchbanks
GeneMarchbanks's picture

CHF drops or UBS drops. Ball is in your court you chocolate eatin' Alpine bastards.

Fri, 09/16/2011 - 16:40 | 1678523 Panafrican Funk...
Panafrican Funktron Robot's picture

Still struggling to understand why they insist on putting holes in perfectly good cheese.  That kind of society deserves to die a slow, painful death.

Fri, 09/16/2011 - 16:37 | 1678515 Mrs Kensington
Mrs Kensington's picture

Seems like Portugals' little island of Madeira has been hiding €1 billion in debt too.   "A grave irregularity".  Hmm.....

This link at 19.15

http://www.telegraph.co.uk/finance/financialcrisis/8720479/Debt-crisis-l...  

Sat, 09/17/2011 - 10:33 | 1679650 espirit
espirit's picture

1Bil is chump change anymore, just ask Jefferson Cty AL.

By the time the "hot potato" debt is written off, nobody will have a clue who ends up with the empty bag.

Fri, 09/16/2011 - 16:47 | 1678544 Pool Shark
Pool Shark's picture

 

 

I thought the most-oversold security was the Swiss Franc... especially since it's now pegged to the Euro...

Fri, 09/16/2011 - 16:51 | 1678557 SheepDog-One
SheepDog-One's picture

Euro oversold? Still not -0- yet, not oversold.

Fri, 09/16/2011 - 16:54 | 1678568 Absalon
Absalon's picture

I thought each contract was 100,000 euros which would mean that the net short was over 5 trillion euros.  Who has the capital to support a $6 trillion net short?

Fri, 09/16/2011 - 17:05 | 1678614 Skid Marks
Skid Marks's picture

Who has the capital to support a $6 trillion net short?

the FED.

Fri, 09/16/2011 - 21:08 | 1679110 IQ 145
IQ 145's picture

These open interest studies for futures contracts are some kind of art form; I tried to make predictions by studying them for years; finally I realized they don't mean shit. That's why they're willing to publish them; there's nothing you can do with them. In other words they belong to the 98% of the "data stream" that's noise.

Sat, 09/17/2011 - 00:15 | 1679342 jimmyjames
jimmyjames's picture

Crashes don't generally happen from being overbought-they do correct but "crashes" occur mainly in oversold conditions-

Fri, 09/16/2011 - 21:20 | 1679117 Die Weiße Rose
Die Weiße Rose's picture

If Europe is close to financial collapse (as you keep on telling us)

then why do you think the Euro is "oversold" ?

The Euro needs to go much lower versus the USD reserve currency, to reflect the European Crisis !

Or could it be, that a stronger USD ( against the Euro ) does not go well

with the undervalued and permanently oversold "beggar thy Neighbour"  Currency -

the world reserved junk-status USD ?

wr;)

Sat, 09/17/2011 - 06:37 | 1679482 Peter K
Peter K's picture

Just like the ES is Ben's instrument of choice to keep Obamanomics afloat in the US, the EUR/USD is the ECB's parent companys choice, i.e. PBofC to prop up it's investment in Euroland. Right now, smart money is short Euro, while the Chinese reserve mgr and it's SWF are keeping it afloat. But I think that the Chinese are in a much better position. At the flip of a dime, like the old cliche goes, they can flip their 1t Euro investment into.... wait for it.... CHF.at a rate of 1.2030. At 3:05am CET :)))))))))))))))))))))))))))))))))))))))))))))) Thanks SNB. But as for Ben, I guess he's just SOL.

Sat, 09/17/2011 - 06:41 | 1679486 Peter K
Peter K's picture

BTW, Open net Spec Positions on the CME have been a great indicator of trends for over a decade now. I always check beforehand. Definately add's P&L to your statement.

Sat, 09/17/2011 - 08:46 | 1679561 dcb
dcb's picture

macd, says buy the euro right now, but it doesn't mean that's the ultimate bottom. my euro short closed out thursday (instead of funny closing I reduced it by a third (having has a feeling about friday based on the speed lines). but you should be layering intot he euro on the dips for now

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