Hormuz Blockade Shifts Trader Positioning In Oil And Key Currency Pairs

(MENAFN- Mid-East Info) Trader positioning on Capital has seen notable shifts across multiple asset classes, reflecting the impact of recent developments in global markets. Investors are adjusting their strategies amid growing economic and financial uncertainty.

In US equity indices, the picture is mixed. The proportion of traders holding longs in the Nasdaq has narrowed to 51% from 55% the previous Monday, bringing it close to the middle and not far off shifting to majority short. The Dow has moved in the opposite direction, with 67% of traders now holding buy positions, up from 63% a week earlier.

In commodities, the closure of the Strait of Hormuz has coincided with notable positioning changes. The proportion of traders holding long positions in gold has reached 79% this week, up from 76% a week ago. Silver remains at 81%, down marginally from 84%, as traders continue to respond to both geopolitical uncertainty and elevated inflation by holding in the face of any pullback. WTI crude oil has seen the most significant positioning shift in the report: from a majority short 57% to a heavy buy 68% in a single week, as some shorts closed their positions following last week's price pullback, while new buyers entered the market buying the dip.

In currency markets, four pairs have experienced shifts: EUR/USD has moved from a majority long 56% to a majority short 57% as traders shorted into gains anticipating the energy-exposed currency to eventually weaken, GBP/USD from 61% long to 54% short, AUD/USD moved from buy 52% to sell 54%, and GBP/JPY from 58% long to an exact opposite short 58%.

Monte Safieddine, Head of Market Research, Capital MENA said:

“The breakdown of talks in Pakistan and the subsequent blockade of the Strait of Hormuz have introduced a new layer of uncertainty across global markets. The positioning changes we are seeing in gold and silver are one of holding on any pullback while shorts look to swiftly exit in oil and buy on any significant dip. What is notable in the equity index data is that positioning has not moved uniformly, opting to close out in tech while going trend-trading in the Dow. The week ahead brings more pricing data and earnings from the financial heavyweights, but the direct negative impact from higher oil prices on risk appetite means traders in all asset classes will be noting energy.”

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