MNI FX PI - GBP Positioning Underpins Bull Run

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MNIFXPi01032021.pdf

Friday's CFTC update showed that GBP's recent bull run had coincided with a continued improvement in the CFTC-logged net position.

In data collected at the Tuesday close, GBP's net position had improved by close to 5% of open interest over the previous week as speculators bought a net of near 9,000 contracts. This drove the 52-week Z-score to 2.15, the highest among currencies surveyed.

This shift in net positioning (hitting a new 52-week high) coincided with the fierce bull run in GBP, resulting in GBP/USD hitting new multi-year highs of 1.4237 – the best level for spot since 2018 and nearing the key double-top resistance of 1.4345/1.4377.

Elsewhere, markets also lifted the CHF net position despite recent underperformance in the currency. The CHF net position improved by over 8,000 contracts on the week. Nonetheless, USD/CHF remains bid, topping the 200-dma at the beginning of this week.

The JPY position worsened most notably, with a net 8,500 contracts sold, equivalent of 4.1% of open interest. This pressured the JPY positioning indicator close to its lowest levels in a year. JPY spot weakness has persisted, with USD/JPY touching the best levels since August 2020 early Monday.