Repeats with no changes
The post-Fed hold fallout continues to favor short-term dollar strength as diminished 2019 rate-cut expectations leads to a reduction in shorts ahead of Friday's U.S. non-farm payrolls release. But, this will only take the U.S. currency so far as bottom feeding and profit-taking put a floor under EUR/USD. With little net change in EUR/USD and the DXY over the recent April 24-30 reporting period, market internals may be signaling a shift in sentiment as the Fed's emphasis on steady rates policy stirs doubts about its willingness to hike rates in 2020.
The most recent CFTC positioning report showed net long USD positioning at its highest level since December 2015, and on a net basis EUR/USD shorts were at their highest since December 2016.
Despite the growing USD long positioning, EUR/USD data 1099741NNET has seen a increase of gross spec longs from near 140,000 contracts in mid-April to current levels just above 148,000 contracts, all while EUR/USD has trolled recent lows.
In the GBP/USD contract positioning has moved from a net short of 80,000 contracts in September 2018 to near flat, owing to reduced Brexit tensions, with approximately 55k contracts short and long in the most recent period.
The rise in dollar short positioning may be a canary in the coal mine for the broader long position in the U.S. currency as bottom-fishers buy near recent two-year lows near 1.1100.