It seems that the CFTC report lacked information, but some conclusions can still be made. In general, the US dollar's downward trend in short positions continues, albeit with a sluggish correction pace. The total short position of the USD against major currencies declined by just $ 291 million, that is, to just over $ 30 billion. This means that the bearish advantage should still be considered significant, and the reduction of the total short position is unstable.
Euro's net long position remains the largest upside rate against the US dollar. However, its liquidation is not going well, with a change of -55 million only during the reporting week, which can be considered insufficient dynamics.
There is no single dynamic that can support the prospects for commodity or protective currencies. If CAD and AUD slightly declined by 107 million and 202 million, then on the contrary, the NZD rose by 163 million. The Mexican peso, in turn, almost remained at zero. Similarly, Japanese yen's position surged by 246 million after a massive decline, while the Swiss franc fell by 426 million. The change in almost all currencies is almost unnoticeable, and this lies within the limits of technical corrections, that is, the currency market is in a state of serene calm and clearly does not see the direction.
It is possible that the only indirect sign of the dollar's likely strengthening is the persistent reduction in the long position in gold. A week earlier, gold's net long position declined by 1.044 billion, but it is already by 4.052 billion this time, reaching 42.164 billion. It should be noted that gold is a natural enemy of the US dollar, and the reduction of a speculative long position may indicate preparation for a wave of dollar growth, but this factor is still indirect and cannot indicate the direction alone.
Most likely, the uncertainty is largely due to the Biden administration's unclear prospects for stimulating the economy. On February 23, Biden was supposed to present his long-term plan in Congress, but the exact date has not been approved. After all, it is supposed to consider no less than one more stimulus package for 3 trillion, but there are not so many incentives in this plan, such as intentions to adjust taxes and this can entirely change the entire balance of incentives. The lack of clarity prevents the dollar from finding a direction and forces investors to wait for at least some clarity.
EUR/USD
The slowdown in the reduction of the euro's long position allowed the estimated price to turn up and go above the long-term average on Monday morning. In this case, a corrective decline in the euro has become less likely.
Today, ECB's head Christine Lagarde will make a speech. However, she has recently carefully avoided any specifics that could upset the fragile balance of the euro. On Tuesday, January's inflation data will be released.
The Euro currency has entered a sideways range. The key resistance is located at 1.2770. An attempt to go higher has become more likely, and purchases are possible on a breakout with a short stop. There are no reasons for strong movements.
GBP/USD
The pound sterling continues to recover the positivity. The net long position rose by 103 million, that is, to 1.926 billion. And although the advantage is not very great, the trend remains.
The primary growth impulse is the hope for speedy economic growth due to high rates of vaccination and getting out of quarantine restrictions earlier than others. Today, Johnson will present a "road map" for opening schools, shops, pubs and restaurants. So, if it is accompanied by positive comments – the pound will receive another boost to growth.
On Wednesday, a monetary policy hearing will be held in Parliament, and it is possible that the idea of a possible end to the stimulus program by the end of the year will be mentioned, which could be another bullish factor.