TD Research discusses the positioning across G10 and flags some of its current FX trades.
"Positioning is most crowded in CHF, SEK, EUR, and gold. They are all sitting above levels (1.0) that our backtests argue to fade on mean-reversion. The market has dialed back long exposure in the JPY the past month and has universally seemed to add more short USD exposure. The one outlier is CAD, where PIT is close to neutral (zero). Our trades are (frustratingly) aiming to poke at these mispricing gaps," TD notes.
"We're long CADNOK (TOTW) but remain short SEKJPY, CHFJPY, AUD, and NZD versus CAD and USD. It's now or never for some of these mean reversion trades over the next 4-6 weeks," TD adds.