Citi Global Flows Analysis

After 6 weeks of selling, clients have turned to profit taking in CAD at these levels. For now, this implies the trend higher for USDCAD is likely to stall (as it did with JPY). The second most notable change in trend is long GBP positions are being sold, after nearly a month of purchases. Our data suggests tactically closing or lightening of long GBP positions for now. Last, we note aggressive real money selling of EUR points to further EUR downside remains the trend.

In EM, outflows continue driven mainly by leveraged Asian FX selling (CNY, INR, IDR & SGD). We note these flows have reached oversold levels in a very short span of time, but as of yet we don’t have a reversal of trend in the data. For now we remain cautious taking clues from price action. INR would be an opportunistic buy.
Strongest Directional Signals
Sell GBP, CHF and buy CAD – After nearly a month as one of the strongest inflows – our data signals interest in GBP buying is waning. We also find the CHF under significant selling pressure from leveraged accounts. CAD buying is the beginning of a profit taking trend.

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