All the currencies saw more selling as of 2/9/2010, even the downtrodden British Pound, which is witnessing some

seriously
bearish sentiment, perhaps excessively so. 75% of all speculative bets on the Pound are bearish/short. Gold and Silver remain
the most favored “currencies,” as the true believers continue to hold on to shinier metals.

10

Ratio of Speculative Longs vs.Shorts (CME) ~ 9 Feb 10

3.97

2.61
1.94 1.83
1.41
1.04
1

0.63
0.55

0.33

0.1
Gold Silver Aussie Canadian New Japanese Swiss Euro British
Dollar Dollar Zealand Yen Franc Pound
Dollar

Source: CFTC
Andy’s Technical Commentary__________________________________________________________________________________________________
 This graph attempts to show the changes in “sentiment” over various reporting periods. It’s easy to see the general downward
drift in sentiment towards foreign currencies, including the metals. The most striking thing about the chart is the “volatility” of the
Swiss Franc and Japanese Yen. Those currencies have behaved independent of the broader trends.

Gold Silver Aussie Dollar Canadian Dollar N.Z. Dollar Japanese Yen Sw iss Franc Euro British Pound

10
5.87 5.81
5.33
4.59
4.4 4.36 2.88
3.97 4.05
4.05 3.84
3.57 3.52 3.54 2.68 3.56

2.61 2.76 2.72 2.61

1.94
1.83

1.41 1.44

1.04

1
0.8 0.85
0.75
0.68
0.62 0.63
0.59
0.55
0.51
0.63

2/9/2010
0.33
1/19/2010
12/29/2009
Ratio of Speculative Longs vs.Shorts (CME/Comex)
11/24/2009

0.1

Source: CFTC
Andy’s Technical Commentary__________________________________________________________________________________________________
 British Pound (Daily)

This was the last time speculators

get very short, very quickly.

In previous looks at the Pound, we’ve cited this 1.57 level as an important support point.
The Sterling has broken below this support, but it is not really breaking down. If 1.57 was
truly key support, the market should have either ricocheted higher from that point, or it
should have accelerated lower on the break. Instead, all we’re seeing is choppy sideways.
The sideways chop near the lows is certainly not bullish, but the excessive bearish
speculative interest is THE reason this market cannot breakdown. It would come as no
surprise if the Pound staged a nasty bounce to shake out some of the new shorts/bears.

Andy’s Technical Commentary__________________________________________________________________________________________________

 British Pound (180 min.)

If you’re convinced of the bearish case for the Sterling and believe that the U.K. is the “next Iceland,” then
shorting this currency probably seems like a worthwhile endeavor. The key, at this point, is to realize that
you’re running with the big herds. So, it’ll be important to understand the various levels that “should” serve
as resistance. In this case, 1.5848 and 1.6101 look like first and second levels of resistance for the next
few weeks. Breaks of these levels should trigger larger short covering rallies that could become violent.

This looks like a triangle pattern that

should lead to one more leg lower.

Andy’s Technical Commentary__________________________________________________________________________________________________

 DISCLAIMER WARNING DISCLAIMER WARNING DISCLAIMER

This report should not be interpreted as investment advice of any kind. This report is technical
commentary only. The author is NOT representing himself as a CTA or CFA or Investment/Trading
Advisor of any kind. This merely reflects the author’s interpretation of technical analysis. The
author may or may not trade in the markets discussed. The author may hold positions opposite of
what may by inferred by this report. The information contained in this commentary is taken from
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