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 broke major support after FOMC last week. The pair looks very bearish and there is no fundamental reasons for a trend change, however speculators reduced their short positions by far last week.
Speculators left their long unchanged from last week while covered 26K of long positions
They are 87K net short, down from 114K last week.
Open interest increased by 14K
This week’s data adds to my analysis from the previous weeks
SPECULATIVE SHORTS EXTREME
Speculative shorts are still at extreme levels. This had proven in the past to be a perfect reversal pattern.
As of this week it seems that the bottom could be forming in EURUSD and the reversal migtt be possible, at least in the short term. I would like to see NET positions to be around 60K and the reversal pattern formed to buy the pair again.
My Bias: Bearish, possibly reversing
Last week’s analysis stands valid:
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 another 2.6K. This is 4th consecutive week when speculator reduce longs. They also reduced their shorts by 7.5K this week.
They are 72K net short, this is down from 77K last week. This is least bearish they have been in 3 months
Open interest fell by 5.8K.
Strategy: Sell rallies.
My Bias: Bullish probably reversing to the downside
Aussie has been printing lower recently. Speculators remain net long but they have been reducing their longs in the recent weeks. This was 5th consecutive week when speculators reduced their longs. Overall, they covered 28K long positions
Speculators reduced their longs by 8K and their shorts by only 586 contracts
They are 13K net long, down from 20K last week
Strategy: Buy dips
My Bias: Bullish USDJPY
Speculators continue to be aggressively bearish in JPY futures. USDJPY has been printing higher prices in the last few weeks. The pair is due a correction to the downside but the trend is up
Speculators reduced 11K longs and added 17K new shorts. This is another significant confirmation of a bearish sentiment in JPY among speculators
Open interest climbed by another 50K contracts.
Strategy: Buy dips
My Bias: Bullish USDCAD
USDCAD has been in a major downtrend driven mainly by happenings in the oil markets. The pair reached 1.30 and rallied aggressively after FOMC last week. The price action was too volatile to establish any positions.
My Bias: Short NZDUSD
There is no much change from the previous week. This market remains bearish.
Speculators covered 1.7K longs and 1.5K shorts.
They are unchanged 4K net short.
Open interest was by by 5.4K
Strategy: Sell NZDUSD on rallies
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