Look beyond ordinary analysis
The Commitments of Traders Report is issued by CFTC.
It reports all open positions in futures markets of three main groups of traders:
Commercial Traders – Hedgers
Non-Commercial Traders – Money Managers
Non-Reportable – Retail market
The report breaks down each Tuesday’s Open Interest and gives us a powerful view on what exactly the big guys have been doing in the marketplace and what their plans might be.
It is issued every Friday and includes data from Tuesday to Tuesday. The three days prior to the release date are not included.
This is an essential tool for gauging long term sentiment in futures markets.
In this report, we cover EURO, GBP, AUD, JPY, CAD, and we focus on Non-Commercial traders as an indication of a profit driven bias.
My Bias: Bearish possibly reversing
EURUSD has been moving lower since the US elections. It is now trading at a major support at 1.0540. The momentum seems to the downside but we could fine some bids after FOMC this week.
Speculators covered 12K of long positions and 17K of shorts.
They are 114K net short, down from 119K last week.
Open interest has been dropping for week. This week, it fell by 14K
My analysis from the previous weeks stands valid
SPECULATIVE SHORTS EXTREME
Speculative shorts are still at extreme levels. This had proven in the past to be a perfect reversal pattern.
Falling open interest from extremes is a confirmation of the bullish setup. This week’s FOMC could be a perfect catalyst for EURUSD to find some buyers.
Having said that, this must be confirmed by price reversal patterns. The price looks very bearish with the potential for another leg down
Strategy: Buy dips if the price bounces off the support, sell rallies if the price print below the support at 1.0540
My Bias: Bearish, possibly reversing
Cable has been printing up from the lows but the pair must be assumed bearish. I would like to wait for speculators to add more bullish positions and cover some more shorts before the reversal can be confirmed.
This week speculators reduced their longs by 7.6K and reduced their shorts by 8.5K
They are 77K net short, this is down from 78K last week
Open interest climbed to 243, it was unchanged from the previous week
Strategy: Sell rallies.
My Bias: Bullish
Bullish to 0.85 as long as speculators remain net long
Speculators reduced their longs by 6.35K and their shorts by the same amount.
They are 20K net long, unchanged w/w
Although speculators have been less bullish on Australian dollar futures in the last past weeks, they remind net long.
Strategy: Buy dips
Speculators turned to be net bearish two week ago.This market is likely to continue higher in the next few weeks. Correction is expected before the uptrend resumes.
Speculators added 2.2K longs and 36K new shorts. This is largest acquisition of long positions this year.
Open interest climbed by 33K contracts. The uptrend is confirmed
Strategy: Buy dips
Speculators became net bearish on Cad futures few weeks ago. Since then, the price was steadily climbing. USDCAD is heavily depended on oil prices. The direction of it will be dictated by OPEC activities. I will be looking to buy USDCAD on dips.
Strategy: Buy USDCAD on dips
Speculators covered 2.5K longs and 500 shorts.
They are 4K net short, up from 2K last week.
Open interest has been dropping for two consecutive weeks.
Strategy: Sell NZDUSD on rallies
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