Forex Market Sentiment: Short EUR & GBP
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.
The forex market saw sentiment around both EUR/USD and GBP/USD flip from long to short in the same week that the two major pairs traded near year-to-date highs; it seems like tastyfx clients have been selling into the rally with new short positions or taking profits by closing past long positions. No major changes to sentiment occurred outside these two European currencies.
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 - 54% Short
Last week's sentiment: 60% Long
Sentiment flipped from long euro to short in the last week amid EUR/USD edging closer to the 1.10 level - the pair traded above 1.09 for a little less than one trading day. tastyfx clients seem to be selling euros into their rally against US dollars after being overwhelmingly long EUR/USD when the major pair was closer to 1.05.
GBP/USD - 54% Short
Last week's sentiment: 60% Long
Pounds and euros continue to trade in a highly correlated fashion against the US dollar as GBP/USD made the same change in sentiment as EUR/USD. GBP/USD edged closer to 1.25 - a price level unsurpassed since June 2021 - in the last week of trading.
USD/JPY - 52% Short
Last week's sentiment: 51% Long
Japanese yen sentiment continues to circle 50/50 even as USD/JPY rises and falls with fear from the regional banking crisis. Yen is traditionally seen as a flight-to-quality asset - rising in times of fear - which has caused USD/JPY to fall dramatically in recent weeks.
AUD/USD - 72% Long
Last week's sentiment: 67% Long
Though Australian dollars have not been as volatile as yen or euros in the last week, AUD/USD sentiment, again, is the largest of the major pairs in either direction. As most major currencies rallied against USD, Aussie held relatively flat between 0.66 and 0.68.
USD/CAD - 59% Short
Last week's sentiment: 62% Short
Canadian dollar was the only other major currency, beside Australian dollar, to post a client sentiment with a majority short-USD position past just a few percentage points. Like AUD, CAD has traded mostly sideways near its lows against the US dollar; more tastyfx clients than not seem to be expecting USD/CAD to revert lower at some point.
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