December 1, 2018 - Institutional Positions & Supply and Demand for the FOREX market

The positions below represent the institutional positions held as of November 27th, 2018!

This week’s report continues to build the case of profit taking on the majors causing a reversal in price. We can see that the $nzdusd and the $audusd have definitely led the pack the last couple weeks leaving both with nice monthly bullish engulfs with the month of November coming to a close. What seems to be taking place on the grand scheme of things is the institutions that are controlling the markets along with their counterparts are using these last few weeks as a time for taking profits on the positions they opened to help cause to move in the direction they are now profiting from. This will likely continue into the Christmas holidays and possibly into the new year. Then we will likely see the biggest moves form due to the profit taking and a push in the opposite direction in order to reposition themselves for a continued move in the original direction. In case I lost you, let me give you an example of something I discovered today with the $usdchf.

During the last three Christmases the institutions were aggressively long the $usdchf and during the Christmas breaks they took massive profits on those longs causing price to drop on each and every occasion. Now fast forward to today, we are at the beginning of December and long positions are at 37k and aggressive and total positions are also aggressive at 54K. There is some room for more to be added but these levels are very reminiscent of what they held previously before their profit taking began. Now you look at what the $audusd, $nzdusd, #gold and #oil have done and look at what situation the $usdjpy and $dxy are currently in and you will start to see what I am saying here. This month we therefore have to be careful in our positioning because what is coming soon should be what we prepare for!

Magic Trader!