Investing.com – Commodity Trading Advisors (CTAs) are maintaining a strong long position in the US Dollar, as indicated by the relative upward movement in both the Dollar and the CTA index benchmark last Thursday, according to Bank of America.
This trend has been consistent, with the Dollar showing gains for the past five weeks and in 13 of the past 14 weeks.
Two weeks ago, it was noted that some trend followers may be allocating more risk to foreign exchange (FX) because its trend is relatively stronger than that of equities, bonds, and commodities. This could be a key factor, as a reversal in the Dollar and against CTA after that could happen more aggressively due to the increase in risk allocation.
In the coming week, fans' short positions in the Japanese Yen are expected to increase. It was also noted that the Brazilian Real was recently added to the daily update, and the model indicates that if CTAs were active in that market, they would be long in the Dollar versus the Real.
According to the model, it seems that trend followers are still long in the and NASDAQ-100, but their position is off the highs due to a decrease in price movement and higher volatility on bring about. The NASDAQ-100 selling tool in the model suggests that the selling of trend followers may intensify if the level reaches 20880.
As for the , if a long position is still in place, it should be close to flat in the short term. Outside of the US, CTAs seem far in and neutral going forward.
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