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Institutional vs Retail Currency Clash Signals USD Strength and Volatility Risks
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Institutional positioning in the latest CFTC Commitments of Traders report suggests the USD bias towards strength and weakness of the yen.
The retail broker positioning provides a contrarian view to the institutional positioning.
This is a conflicting position to the institutional positioning and suggests that the crowded trades of the latter may be vulnerable to reversals.
The most interesting observations are made in the EUR/USD and USD/JPY pairs, where the retail positioning is at odds with the institutional positioning.
In the latter, the retail positioning suggests that clients are trying to short the USD/JPY while the institutions are net-short the yen and long the dollar.