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The Weekly Commitments of Traders Report
Know what the “smart money” is up to
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For most recent reports go to
Commitments of Traders
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To learn how to use C.O.T go to
Commitments of Traders – An Ultimate guide
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For more weekly C.O.T tracking go to
Commitments Of Traders Sheet
[/stm_icon_box][/vc_column][/vc_row][vc_row full_width=”stretch_row”][vc_column][vc_separator color=”sky” border_width=”7″][/vc_column][/vc_row][vc_row][vc_column width=”1/12″][/vc_column][vc_column width=”10/12″][vc_column_text]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.
NOTE:
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.
C.O.T Positioning
EURUSD: Bullish
GBPUSD: Bullish
AUDUSD: Bullish
USDJPY: Neutral
USDCAD: Bearish
EURO – Euro Futures
My Bias: Bullish
Once again EUR/USD is seen trading in a very tight weekly range with a high to low spread of around 70 pips. These types of ranges are unusual and volatility is at the lower end of what has been typical over the last decade or so.
The light economic calendar this week did not help. Later in the session, the latest PCE price index figures will be released out of the United States. Although these figures play a large role in Fed decisions, they rarely trigger volatility in the dollar pairs. Analysts are looking for the core PCE index to come in at 1.6% in the year to November, unchanged from the reading last month.
Positions:
Similarly to the previous week, speculators left their long positions unchanged, while covering 1.3K of their shorts. They were 65.6K net short. My analysis from the previous week stands valid:
Speculative positions are on 33 weeks moving average, which is rather undecided but given other factors and a bullish price action, my bias is to the upside and I will be looking to buy EURUSD on dips.”
Open interest dropped by 100K. This is due to December contracts being delivered and has no bearing on price
Strategy:
Buy EURUSD on dips
GBP – British Pound Future
My Bias: Bullish GBPUSD
Withdrawal Bill Vote
Attention will now turn to Parliament where MP’s is due to vote on the Withdrawal Bill. The Bill is expected to pass through the House of Commons without any further hold ups, given Boris Johnson’s 80 seat majority. The Brexit bill contains no possibility of extension will keep no deal Brexit fears alive and kicking
US GDP up next
GBP/USD traders will now look ahead to US data releases. GDP, the third revision for Q3. No change is expected from the previous reading at 2.1%, the initial reading was 1.9%. Upbeat personal spending and core PCE would be seen as validating the Fed’s recent decision to keep rates on hold potentially sending the dollar higher.
Positions:
GBPUSD dropped this week but the speculative positions show strong bullish bias for another week. This week speculators added fresh 7.4K long positions and covered 9.5K of their short positions. They were 5.8K net short, which was lowest for a very long time. If this dynamic continues, speculators will become net long in the next few weeks.The last time they were net long was exactly a year ago. My bias remains bullish and I see the current decline in GBPUSD as an opportunity to buy GBP futures.
Strategy:
Buy GBPUSD on dips.
JPY -Japanese Yen Futures
My Bias: Bullish USDJPY
The US dollar initially tried to rally during the trading session on Thursday, but then failed again at the same resistance, that of course has caused significant problems previously. Overall, I believe that this market probably has a bit of a floor near the ¥108.50 level, just as the ¥110 level should offer a significant amount of resistance. If we were to break above there then the pair would go much higher, perhaps reaching towards the ¥111 level. That’s an area where there is a bit of a gap, so I think that would be the initial target. Above there, then the market could go looking towards the ¥112.50 level after that.
Positions:
After taking profits, speculators were bullish this week. They added 1.5K new long positions and left their shorts unchanged.They were 42K net short, which was only slightly changed from 43.7K in the previous week.
Strategy – no change:
Pause
AUD -Australian Dollar Futures
My Bias: Bullish AUDUSD
Analysts at MUFG Bank, point out that the Australian dollar has moved closer to a fair value against the US dollar but they warn it remains vulnerable in the near term on a technical basis. Still, they see positive signs for the week ahead.
“A currency to watch over the coming two weeks in the G10 space might be AUD. Short-term yields are breaking higher. The stronger Australian employment report for November has reinforced that positive dynamic. The 2-year yield is 24bps higher since the start of December and reached as high as 0.90% today. The November high (0.92%) and the September high (0.94%) could be breached which could trigger some AUD demand.”
Positions:
Speculators took profits yet for another week. This time they covered 13.3K of their long positions and 3.5K of their short positions. They were 46.6K net short, which was up from 36.8K in the previous week.The price action points to the upside in AUDUSD
Strategy:
Buy AUDUSD on dips.
CAD – Canadian Dollar Futures
My Bias: Bullish USDCAD
The Canadian dollar is trading on a firm note and back to levels last seen on October 30. A confluence of events occurred to underpin the currency and yesterday’s domestic inflation report was just the latest development.
Statistics Canada reported that Core Consumer Price Index rose 2.2% in November. The result was exactly as forecast by the Bank of Canada and helps to validate its decision to leave interest rates unchanged while adopting a “wait-and-see” approach. The Canadian dollar got a bit of lift from the news on the belief that the inflation reading reduced the chances for a rate cut for the foreseeable future.
The Canadian dollar is also supported by an improvement in the risk sentiment tone. The anticipated China/U.S. Phase 1 trade agreement points to increased global growth and business investment as the proverbial “downside risks” dissipate. Yesterday, China announced that it was introducing new tariff exclusions to some U.S. products. However, the agreement has yet to be signed, and that may be tempering some enthusiasm. Last June, U.S. and China officials were about to meet to sign a deal, then everything fell apart. Both sides got into a huff and started trading new tariffs. It could happen again.
Positions:
Speculators covered another 7.7K of their long positions thi week. At the same time, they added 1.8K of short contracts to their portfolios. They were 11.2K net long, which was changed from 20.7K in the previous week. I expect more declines in USDCAD market in the coming weeks.
Strategy:
Sell USDCAD on rallies
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