Forex - Flows: DXY - spec most short dollar since Jan 13


 20:11 (GMT) 11 Aug

  [Forex Flows]

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Flows: DXY - spec most short dollar since Jan 13 (0100-RPDQ-C01)

Despite today's dollar decline after the CPI data, it's worth taking note of the latest IMM data. Overall, the market is most dollar short since Jan 13. The DXY was at the range lows of the last 5 years at the time, and on the shorter horizon the dollar low that month gave way to a almost 6 figure rally over the next 5 months. You don't have to be a fan of the dollar to consider that the market has gone from medium-term stretched dollar bullish to potentially short/medium-term stretched dollar bearish. Meanwhile, net euro longs are at their highest since May 11. The euro trade weighed saw a 1 year peak that month and gave way to 17% decline over the next approx. year. That was during a long-term bear market so will have seen a more powerful downleg, but it still suggests we are due a corrective phase. The EUR TWI has been strongly outrunning its supporting annual uptrend and a correction would take the euro back around 5%.


Forex - EUR/GBP, GBP/USD Flows: GBP marginally better on the data, but unlikely to last


 08:50 (GMT) 10 Aug

 [Forex Flows]

GBP is a shade better after industrial production beat expectations, though delayed oil field maintenance the reason and that does not bode well going forward. The trade deficit was unexpectedly wide, and after the PMIs suggested the weak GBP was helping export orders that does not show in these figures, while the ONS sees a minor downward adjustment to Q2 GDP of 0.01%. It has blocked an early return to .9050+ for EUR/GBP, but we expect it's a move that has been delayed rather than cancelled.


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