Large specs showing optimism
AUD/CHF technically vulnerable
According to last weeks Commitment of traders report (COT), large speculators are net-long the AUD/CHF pair, but not significantly. Leveraged funds, which tend to have a better handle on short term price action compared to asset managers, increased their short positions last week on the AUD by +9,933 totalling 24,817, whilst adding just +879 short positions to their existing 3,456 positions on the CHF. Their total long positions on the AUD now total 47,132, a decrease of 201 from last week, and on the CHF they added +77 positions to their 15,343 reported the week before last.
That puts leveraged funds at 65.51% Long the AUD and 34.49% Short, and 78.06% Long the CHF (21.94% Short).
Asset managers, which tend to perform better over the midterm are 56.23% Long AUD (43.77% Short) and 69.22% Long CHF (30.78% Short)
From a technical standpoint, the daily chart suggests the pair is at risk of further downside. Having cleared the series of lows which provided good support from June ‘20, the pair now has to breach weaker support located just below the 200 DMA at (1) in order for the decline of late to continue.
Note: The 200 DMA is still in play, which could provide good support