AUDUSD is firing on all cylinders in the long zone whilst 65.81% traders are short and actually made it to the strong short zone in Fridays session before pulling back a little into the long zone. Both EURUSD and GBPUSD are now well within the neutral zone. Pending Home Sales coming out of the US at 10:00am EST is the big new event of the day and if we do have a strong deviation from consensus we expect it to have a strong influence on retail positioning.
EURGBP has exploded into the strong long zone with almost 70% of retail traders short after UK Retail Sales data yesterday. AUDUSD is back in the long zone and EURUSD is holding its ground in the long zone. USDCAD after a brief dip in the short zone is now back in the strong short zone. The German Ifo Business Climate is the main retail position moving event of the day.
GBPUSD has made a strong move back into the neutral zone after some strong selling yesterday. EURUSD made a similar move but remains in the long zone even though it has dropped back considerably. We have a slew of PMI data coming out of the EuroZone from 4am EST onwards. Retail Sales out of the UK are likely to have a strong impact on retail positioning, Core Durable Goods Orders at 8:30 am EST is the big number out of the US.
Current positioning is remaining firm, we're seeing the expected pullback in EURUSD, but the pair remains in the strong long zone overall. With the release of the Annual Budget in the UK at 8:30 am EST we expect some volatility with GBP crosses, this could have an impact on retail positioning. New Home Sales out of the US at 10:00 EST is a likely catalyst today if we get a major deviation from expectations.
EURUSD and GBPUSD continue to make parabolic up moves whilst retail traders increase short positions. We would advise caution in the short term as strong moves like this do not tend to last, so we may see a pullback in the short term. We remain very much in the strong short zone as have for a long while with the USDCHF and USDJPY. The swissy has sustained good momentum behind an overall down trend especially last week with 5 straight down days.
As EURUSD nears 5 months highs retail short positions have become increasingly stronger, today 68.62% of retail traders in our data set are short. This has pushed EURUSD into the Strong Long zone. What's also worth noting is EURGBP which is the long zone, however retail traders have become increasingly short this pair even though it continues to trend higher.
Intervention. For the first time in a decade we're seeing multi-nation intervention to help weaken the Yen, as a beleaguered Japan works to recover from a multi-faceted disaster. Weakening of the Yen eases some of the strain on Japanese exporters, many of whom are being forced to keep factories closed due to power shortages and structural damage after the earthquake.
Some dramatic JPY strength overnight is pushing JPY crosses into in the short zone. USDJPY remains in the strong short zone as it has been for the last few months. GBPJPY has edged its way into the short zone, and although still in the neutral zone, EURJPY is not far behind. Developments with the Fukushima Nuclear plant could have a major impact on overall JPY positioning.
In yesterdays session we saw some very 2 sided action especially in the Euro, we initially saw a EURUSD sell off as a flight to the safety took hold due to a sell of in far eastern equities. In the early part of the NY session this fear reversed and strong buying took us back the levels at which we started the day. this show of strength has pushed GBPUSD and EURGBP in the long zone and edges EURUSD into the strong long zone.
Some big moving news events today with the release of the German ZEW Eco Sentiment at 06:00 EST which is likely to have an impact on all EUR crosses if we have a deviation from consensus. Out of the US we have the TIC report released at 09:00 EST and the big one is the FOMC Statement at 14:15 EST.
After Fridays action EURUSD battles its way back into the long zone with more than 60% of retail traders short the pair. The tragic events in Japan led to some dramatic action with the USDJPY, however this has done little to change overall retail positioning with over 75% of traders long USDJPY it stays firmly in our short zone. The key news events likely to effect retail positioning are EUR Industrial Production (06:00 EST) and AUD Monetary Policy Meeting Minutes (20:30 EST)
Most pairs seem fairly neutral today, although action early in the London session seems to have some volatility behind it. Many potentially market moving events today that are likely to effect positioning key to watch will be the CAD employment data released at 07:00 EST, this pair has maintained a strong bearish bias in our research for many weeks (77% of retail traders long). The employment data released today could have a dramatic impact on positioning.
We're sitting pretty neutral across most pairs at the moment, the pair most likely to see a shift in retail positioning today is GBPUSD with Manufacturing Production released at 4:30 EST and the BOE interest rate decision coming out at 7am EST.
