Saturday, June 19, 2010

FX Drama

From Zero Hedge:
 COT Weekly Data Discloses Biggest Euro Short Covering Episode In History


The CFTC Commitment of Traders is out and, it's a doozy: the amount of short covering in net spec EUR short positions hits what is certainly an all time record, as just under 50 thousand (49,585) short contracts are covered. This represents a huge 44% of all outstanding EUR net shorts (-111,945) as of the prior week. No wonder the EUR surged, and no wonder Goldman downgraded the EURUSD - in tried and true fashion we wonder how many banks tightened up margin requirements only to force the biggest short squeeze in history.

And also ; SNB Loses 8b on Euro Intervention. Folds.
 "The Euro/CHF cross closed in NY at 1.3732 Friday. I believe that is an all time low close. I am still scratching my head how this could happen during a week where the Euro did a five big figure move to the upside.

The Swiss National Bank has been intervening in the FX market to slow/stop the appreciation of the CHF against the Euro for the past six months. This week they threw in the towel and will let the Franc float higher. It cost them a bundle."

Could prove an interesting week in FX coming up:
 USD
 click to enlarge
Note the .382 retrace of the last leg of the USD rally and horizontal support in this area.

And of course ;
           JPY   

      click to sharpen   
So with the shorts out of the Euro, the Swiss not supporting any longer(supposedly) , the Yen poised  to rip up through a long term tech point, and the USD sitting on Fib. support, Act 3 should be about to start.
     


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