US Dollar Index: US Dollar index futures positioning changed a fair amount.  Specs cut longs by 3,951 and are now long 2,278.  The turning point was back in November when the difference between commercial and specs was extreme.  Specsâ�,��"� USD index longs have steadily declined since then.  As such, the path of least resistance, according to COT data, is USD negative until specs are extremely short.

EUR: Euro futures positioning remains extreme with the difference between commercials and speculators increasing to 157,808 from 135,306 the prior week.  Specs increased net longs by 10,183 to 65,525.  In fact, this is the longest that specs have ever been.  The difference between commercials and specs is also the largest ever at 157,808.  The previous record was 139,838 in November 2004, a bit more than a month before the all-time high of 1.3666.  The extremity of the data suggests that we are nearing a top in EUR/USD.

GBP:  Cable traders remained net long after flipping to net long the prior week.  Interestingly, the increase in longs is accompanied by an increase in open interest of 10,380.  This bodes well for bulls regarding long-term prospects.  A rising market accompanied with and increasing open interest is indicative of a healthy uptrend.  It is not until positioning reaches an extreme reading (based on historical standards), that one can anticipate a reversal.

CHF: CHF specs added to shorts for the first time in 6 weeks and are now short 24,429.  Commercials were virtually unchanged and remain long 26,657.  The data from late February, when the difference between specs and commercials was 151,680, called the top in USD/CHF and the trend since then has been for specs to cut short positions.  This is consistent with a strengthening CHF and thus declining USD/CHF.

JPY:  Yen futures specs cut shorts to 6,490 short and commercials added cut longs / increased shorts and are now also short (5,563).  Expect JPY specs to flip to net long soon, which is consistent with commercials being short, as well as a strengthening JPY.  Again, this data favors Yen strength (USD/JPY weakness) until an extreme reading.

CAD:  CAD traders added to longs by 8,705 and are now 15,623 long.  Commercials flipped to net short.  The chart above shows that when CAD traders flip to net long, they will typically become â�,��"more longâ�,� as USD/CAD decreases (the chart appears as if the price is increasing in price, but it is actually decreasing â�,�“ look at the right axis).  This, the recent COT data favors USD/CAD short positions.

AUD:  Specs flipped two weeks ago when AUD/USD was at .7281.  We commented at that time that â�,��"the flip to the long side by specs signals more AUD strength.â�,�  Sure enough, AUD/USD trades above .7600.  Nothing exists within the COT data that suggests a reversal to the downside.  Extreme values signal reversals.  AUD positioning is typically not considered extreme until difference in positioning between specs and commercials is greater than 90,000.  The difference now is just 18,753.

Jamie Saettele is a Technical Currency Analyst for FXCM.