CHART OF THE WEEK - CURRENCIES
As President Trump takes office today with a lot of focus on the stock market and the economy, there is an opportunity in Currencies for a high reward/low risk trade based on trader positioning.
As you can see from the first chart that includes all the Currencies except for the US Dollar, Speculators are making a huge bet that the Dollar strength continues, at least for the first part of 2025.
If we break the chart down to the commodity currencies (Australian Dollar, Canadian Dollar and New Zealand Dollar), we see where the most crowding is. On an indexed level, there are other currencies that are also set up, but when looking on a net basis, these three currencies are where Speculators are most short. Now we wait for the market to confirm the long trade with a news failure.
For new followers, the CMR process is to wait for Speculators (both small and large) to become extremely crowded and then fade their trade after a news failure in the market confirms the trade. You want to be on the same side as Commercials when the market turns.
Hope you enjoyed today’s post. If you are interested in learning more about the Crowded Market Report and the services we provide, which includes more in depth analysis of all major markets including Equities, Currencies, Crypto, Fixed Income, Precious Metals, Industrial Metals, Softs, Grains and more, please visit www.crowdedmarketreport.com.
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Thanks,
The CMR Team on behalf of Jason Shapiro
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how about the yen USD