Commitments of Traders
As expected, EURUSD climbed higher and closed the week at 1.0639. This is the price level we have not seen since early December. The price looks like there is more upside potential towards 1.0850 resistance. My bias remains bullish given speculative buying continues.
EURUSD formed triple bottom at 1.0380 area and advanced higher. The pair traded as high as 1.0610 just before Friday’s NFP. The market closed at 1.0530 but the pair looks like there is a longer term bullish reversal forming. If the price stays above the current level next week, more upside is likely.
Speculators added 6K longs and reduced shorts by 3K. This is 4th consecutive week when speculators reduce their shorts and a first significant week with them adding longs They are 69K net short, down from 78K last week and 87K two weeks ago. Open interest increased by 6K
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.
EURUSD moved sharply up from the support driven mainly by US election happenings. Speculators kept adding short positions into higher prices and driven them to multi year highs. Historically, these levels where quickly followed by market reversal to the upside.
USDJPY had another positive week. The pair rallied and closed the week just above 114 handle. There was a major change in speculative positions this week. Smart money covered 22K long positions. This makes they hold least longs in over 6 weeks. At the same time, they kept their shorts unchanged from the previous week At the moment speculators are 46K net long, this is DOWN from 69K last week. They hold 52% of the total Open Interest in shorts, DOWN from 62% last week
What a week for GBP. The carnage continued and was topped up by a massive flash crash in GBP. The Pound collapsed against all major currencies during the Asian session last Friday. It still has not recovered all losses. This report shows that speculators added a massive 18,441 new short orders before the flash crash last Friday. Let’s do some maths here: Speculative positions in $$$ two days before the flash crash: Added 18,441 shorts @ $62.500 per contract = $1.152 Trillion Added 8,583 longs @ $62.500 per contract = $536 Billion TOTAL AMOUNT OF GBP FUTURES SOLD = $616 Billion Historically speaking - this is an extremely big order just before the currency collapsed. Did they do it?
Interesting picture is painting in CAD futures at the moment. First time since May 2015, speculators are net short in CAD Futures. Every time they became net short, the price of USDCAD established long term, sustain up trend. After few months of range trading, USDCAD printed a strong resistance at 1.33 and a strong support around 1.2850. This week speculators reduced their longs by 22K and added to their shorts 5K orders. This is a major sentiment change. They officially hold more short contract in CAD futures than long.
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- Daily Price Action Analysis – 27th March. EURUSD at major resistance March 27, 2017
- Weekly Fundamental Analysis. Week ending 2nd April. USD lower across March 27, 2017
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- C.O.T Report – Week 11. Speculators pile up on EUR and cover 60% CAD longs March 26, 2017