COT and U.S. Dollar

The U.S. dollar had retraced approximately 38% of the first leg of 2005 to 2008 decline by October 2006. The below chart shows how commercial traders increased their short positions as price rallied.

The U.S. dollar has nearly completed a similar retracement in 2010. The only difference is that the size of the short position is much greater than 2006.

When the time window closes, this is going to move. Stay tuned.

U.S. Dollar Index and the Commercial Traders COT Futures and Options Short As A % of Open Interest: