• AUD/USD
    SELL
    -
    BUY
    -
    CHG
    -
  • EUR/GBP
    SELL
    -
    BUY
    -
    CHG
    -
  • EUR/JPY
    SELL
    -
    BUY
    -
    CHG
    -
  • EUR/USD
    SELL
    -
    BUY
    -
    CHG
    -
  • GBP/USD
    SELL
    -
    BUY
    -
    CHG
    -
  • USD/CAD
    SELL
    -
    BUY
    -
    CHG
    -
  • USD/CHF
    SELL
    -
    BUY
    -
    CHG
    -
  • USD/JPY
    SELL
    -
    BUY
    -
    CHG
    -

Traders Selling Euro, Buying Aussie

Midway through the 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. Find out what traders are thinking this week.

Source: Bloomberg
Picture of Frank Kaberna
Frank Kaberna
Director of Strategy, Chicago

Forex Sentiment Update

Year-to-date extremes for both Australian dollar and euro versus US dollar - AUD/USD fell back to 0.66 while EUR/USD rose to 1.11 - have traders pushing further into long and short territory, respectively.

Client Sentiment rose to 78% long in AUD/USD, which equates to more than 3 in every 4 traders being long Aussie as opposed to short. The downside action in Australian dollar could be attributed to risk-off trade driving down prices for industrial commodities, which AUD can be highly correlated to.

European currencies, on the other hand, have taken advantage of the growing fear in the US as EUR, CHF, and GBP all trade near highs against USD. tastyfx clients seem to be on the other side of this trend with sentiment at 67% short EUR/USD and 61% short GBP/USD.

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.)

Trend followers might go with sentiment, while contrarians would tend to go against the trend. For example, a 65% long measure in EUR/USD could reflect a buying opportunity for trend followers or a selling opportunity for contrarians.

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EUR/USD Sentiment - 67% Short

Last week's sentiment: 55% Short

Euro-US dollar short positions rose among tastyfx clients as EUR/USD ran up to 1.11 at one point this week and continues to trade comfortably above 1.10. High prices for the last year of trading have traders thinking that a reversal is in order, but EUR/USD has been as high as 1.23 in the last three years.

GBP/USD Sentiment - 61% Short

Last week's sentiment: 52% Short

British pound price action and client sentiment continue to track those of euro - making them a similar trade and potentially poor diversification; that is, short euro and short pound have been a very similar trade of late as both markets trade near recent extremes of 1.10 and 1.25, respectively.

USD/JPY Sentiment - 60% Short

Last week's sentiment: 61% Short

Japanese yen attempted to stage a rally as US fear was rising amid debt ceiling and regional bank concerns, but it wasn't enough for JPY to make any significant gains. USD/JPY is still trading between 130 and 135, and sentiment is still around 60% short.

AUD/USD Sentiment - 78% Long

Last week's sentiment: 66% Long

Australian dollar's descent to 0.66 against USD has been cause for another run up to almost 80% long as tastyfx clients position themselves for a bounce back. Per the chart above, you can see that AUD/USD has not fallen significantly below 0.66 since November of last year, but only time will tell if the level holds again this time.

USD/CAD Sentiment - 65% Short

Last week's sentiment: 54% Long

US dollar was able to rise above 1.36 against Canadian dollar once again as the trend of US dollar strength against commodity currencies continues. Crude oil's decline to the mid-$70s did not help what has been an already rough stretch for CAD. Traders are going against the trend for the moment, but it will be interesting to see how sentiment changes if USD/CAD can get back to 1.38 - highs for the last year of trading.

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.