Key Points:
The year began with stretched USD longs, particularly against CAD, CHF, and SEK.These positions have been cut but remain net long.
2️⃣ JPY Longs Have Increased ?
The market has flipped from slightly short to long JPY.This aligns with price action, as investors join the upward JPY trend.EUR/USD remains net short but is no longer at extreme levels.Short positioning has reverted to its post-COVID average.
4️⃣ SEK an Outlier, Investors Skeptical on Rally ??
Despite SEK appreciation, investors remain cautious about its sustainability.BofA is long EUR/SEK via options, suggesting they expect SEK weakness.FX positioning has realigned with recent market trends, with investors trimming USD longs and increasing JPY and EUR exposure. While the market remains short EUR/USD, the positioning is less stretched, reducing the risk of aggressive short-covering rallies.
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This article was written by Adam Button at www.forexlive.com. Read More Details
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