Forex Market Perceptions in Major Currencies
Another week of US dollar gains coincided with an increase in long holdings for GBP/USD and AUD/USD among our customers. Whilst the USD is not as powerful as it was during the currency's high in 2022, it is approaching similar levels in AUD/USD and USD/CAD in particular. The bulk of our clients appears to be playing the contrarian since they are short the dollar in most key pairings.
Customer Sentiment displays the percentage of our client accounts that have open long or short positions. If the majority of client accounts with open positions in a particular market are long, the price is expected to climb; if the majority is short, the price is expected to fall. (Values taken using our Client Sentiment metric as of the previous day's closing.)
USD/EUR - 57% Long
Last week's situation: 63% Long
Despite the US dollar has risen against the majority of its major rivals in the previous week, the euro has been one of the non-USD bright spots, remaining relatively flat versus the USD but growing against other currencies such as GBP and AUD. Longs fell from 63% to 57% among our clients throughout this period.
USD/GBP - 66% Long
Last week’s situation: 64% Long
In the great scheme of things, the pound has traded roughly unaltered over the previous week; yet, the pound has lost some ground to the dollar, while the euro and the dollar have pushed closer to extreme levels seen in 2022. Our clients increased their long position in this sinking pair from 64% to 66%.
USD/JPY – 59% Short
Last week’s situation: 63% Short
The yen traded fairly flat in the previous week as Thursday's Bank of Japan meeting looms with its expected announcement on Japanese interest rates. Our customers cut their total short USD/JPY holdings from 63% to 59% in the run-up to this occurrence.
AUD/USD – 77% Long
Last week’s situation: 73% Long
In recent trade, Australian dollars reached year-to-date lows far below 0.66, coinciding with an increase in long holdings among IG customers from 73% to 77%. The Reserve Bank of Australia raised interest rates by the predicted amount, and considering the reaction in AUD vs USD, EUR, and other currencies, the market may have desired a larger boost.
USD/CAD – 71% Short
Last week’s situation: 73% Short
Likewise, with the Australian currency, Canadian dollars fell significantly versus US dollars. USD/CAD has reached fresh year-to-date highs, trading over 1.37 in recent activity. Even though prices were more severe during the US dollar bull run, short USD/CAD holdings among IG customers decreased somewhat from 73% to 71%.