Forex Market Sentiment: Traders Buying USD
At the start of every trading week, we update Client Sentiment levels - percentage of tastyfx clients with long or short positions - for major forex pairs like EUR/USD, USD/JPY, and more.
Long US dollar positions increased among tastyfx clients as USD depreciated against most major currency partners in the last week; for example, USD/CAD fell from 1.38 on March 24th below 1.35 on April 3rd, and, in the same time, sentiment on USD/CAD went from 59% short to 64% long. Will tastyfx clients be proven right? Or will USD continue its decline?
Client Sentiment shows the percentage of tastyfx client accounts with open positions that are currently long or short. If the majority of client accounts with open positions are long a given market, then they expect the price to rise; if the majority is short, then they expect it to fall. (Values taken using tastyfx's Client Sentiment measure as of the previous day's close.)
EUR/USD - 61% Short
Last week's sentiment: 54% Short
It was only a few weeks ago that the majority of tastyfx clients were long EUR/USD, but the forex pairs ascent has caused a shift in sentiment. Euro has remained below 1.10 against the US dollar for all but a handful of days in the last year of trading; with the market just a penny or so below this level, traders look to a reversion or new normal in EUR/USD.
GBP/USD - 65% Short
Last week's sentiment: 54% Short
GBP/USD has quickly become the most shorted major pair as British pounds close in on the 1.25 level against US dollars. GBP's climb has coincided with increasing shorts among tastyfx clients in the currency as traders seem to think that the run-up to 1.25 will not hold.
USD/JPY - 57% Short
Last week's sentiment: 52% Short
Continued sideways price action between 130 and 135 for USD/JPY has resulted in relatively sideways changes to sentiment around the Japanese yen. Until JPY breaks in one direction or another, it seems as though sentiment will only shift subtly.
AUD/USD - 54% Long
Last week's sentiment: 72% Long
Australian dollars went from one of the largest long positions among tastyfx clients to as close to a 50/50 relationship as any major forex pair. AUD/USD bounced back from trading below 0.66 in early March to nearly surpassing 0.68 for the first time since February.
USD/CAD - 64% Long
Last week's sentiment: 59% Short
USD/CAD sentiment flipped from short to long covering more than 20% of ground along the way. The change in sentiment is coming on the heels of six days lower in a row for USD/CAD going into today. USD will bounce back against CAD at some point, but the question remains: from where?
This information has been prepared by tastyfx, a trading name of tastyfx LLC. This material does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. You should not treat any opinion expressed in this material as a specific inducement to make any investment or follow any strategy, but only as an expression of opinion. This material does not consider your investment objectives, financial situation or needs and is not intended as recommendations appropriate for you. No representation or warranty is given as to the accuracy or completeness of the above information. tastyfx accepts no responsibility for any use that may be made of these comments and for any consequences that result. See our Summary Conflicts Policy, available on our website.
