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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: Mixed
USDCAD: Bearish
EURO – Euro Futures
My Bias: Bullish
The Sino-American trade deal has boosted the mood, but now President Donald Trump is focusing on Europe. EUR/USD has failed to recover amid fears of auto tariffs, a cautious central bank and despite upbeat figures. Will it extend its falls? The last week of the first month of 2020 features the Fed, GDP from both sides of the Atlantic, EZ inflation, and more. Trump later threatened to slap levies on European cars if negotiations fail to advance. The US is unhappy with France’s tech tax and with an alleged imbalance in automobile tariffs. His comments – echoed by other American officials – weighed on the euro. EUR/USD failed to recover even when the dollar came under broad selling pressure amid diminishing fears.
Positions:
This week, speculators added 4.3K new long positions and 3.1K short positions to their portfolios. They were 47K net short, which was lower than 48K in the previous trading week. The same dynamic continues, smart money buys EUR Futures on declining prices while the Open Interest rises. This is clear bullish sentiment and should indicate higher prices are to come in the nearest future.
Strategy:
Buy EURUSD on dips
GBP – British Pound Future
My Bias: Bullish GBPUSD
After surging to a high of $1.3164 in early trade this morning, GBP/USD quickly pared those gains and is currently trading 0.2% lower on the day as it tests support at $1.31
The whipsaw action in sterling came following PMI data and as investors attempt to second guess the BoE ahead of the rate decision next Thursday.
PMI Readings
Manufacturing 49.8 vs. 48.7 exp. (47.5 previous)
Service sector 52.9 vs 51 exp. (50 previous)
Composite 52.4 vs 50.7 exp. (49.3 previous)
The data shows that not only is the UK manufacturing sector almost out of contraction, the dominant service sector is firing ahead. The service sector accounts for 80% of economic activity in the UK economy, giving a good indication of its importance.
The composite pmi reading, which is a useful gauge for economic output across the economy, jumped to its highest level in 2 years.
Positions:
After a few weeks of bullish sentiment in GBP Futures, speculators reverted to being bearish for a change. This week they covered 4.5K of their long positions and added fresh 2K of shorts. This has pushed net positions from 31K net long in the previous week to 25K this week. Speculators are still well net long for 3rd consecutive week and there is no reason to believe the prices of GBPUSD will start to decline. The bullish sentiment is strongly established in this market and any dips should be treated as an opportunity to buy GBP long term.
Strategy:
Buy GBPUSD on dips.
JPY -Japanese Yen Futures
My Bias: Mixed USDJPY
From its close on January 7th at 107.99 to finish at 110.18 on the 16th and 20th of this month the dollar yen gained 2% in seven trading sessions. This was a tribute to the unwinding of the trade war risk premium as much as a positive judgement on the US China pact. About half that rise was returned this week with the pair going to ground at 109.25 in afternoon action on Friday, a loss of 0.8%.
It is too soon for any judgement on the trade agreement to show up in US statistics. The very limited information from the economy in housing and jobless claims this week affirmed the continued American expansion and excellent labor market. Considerations for the status and impact of phase two negotiations, despite President Trump’s comment that he would be traveling to China, are not likely to be a topic until after the US election in November, all the more so while China is beset with a public health emergency.
Positions:
USDJPY was trading a bit lower last week but the speculative positions do not support longer term decline at all. This week smart money added 876 new long positions only and at the same time they added 14K new short positions to their portfolios. This is after they added 21K in the previous week. They were 44K net short, which was up from being 31.4K net short previously. Clearly speculators prefer short side of JPY Futures trade ( this is bullish for USDJPY )
Strategy – no change:
Buy USDJPY on dips
AUD -Australian Dollar Futures
My Bias: Bullish AUDUSD
The Australian Dollar closed lower on Friday, taking out the previous session low and signaling the selling pressure is getting stronger. The move also erased the previous session’s gains that were fueled by better-than-expected labor market data. The price action indicates that traders have shifted their focus from economic data and central bank activity to growing concerns over the spreading of the coronavirus.
On Friday, the AUD/USD settled at .6826, down 0.0022 or -0.32%.
We’re looking for a lower opening on Monday with the Aussie closing at its lowest level in over a month Friday. At this time, the Australian economy is vulnerable to the fallout of both bushfires raging within the country, and the coronavirus outbreak in China.
Positions:
Speculators Kept taking profits off the table in the AUD market. This week they covered 1.4K of their longs and 2.6K of their shorts. They were 19.3K net short, almost unchanged from being 20.5K net short in the previous trading week. My longer term outlook remains bullish and the current decline in the price of AUDUSD should be treated as an opportunity to buy AUDUSD
Strategy:
Buy AUDUSD on dips.
CAD – Canadian Dollar Futures
My Bias: Bullish USDCAD
Expectations are low heading into today’s Bank of Canada meeting, where the rate statement is scheduled for 15.00 GMT with the press conference to follow at 16:15. Market pricing indicates a near zero-chance that the central bank decides to change interest rates in Canada today. That would mean the benchmark interest rate in Canada staying at 1.75%. In fact, most economists see the interest unchanged from 1.75% throughout all of 2020. If the meeting is to generate any volatility, it will be more likely caused by the BOC’s guidance on future growth and inflation.
Positions:
Speculators added fresh 4K of long positions and covered 1.4K of their shorts. They were 28K net long, which was up from being 32K in the previous week. This is fairly bullish sentiment ( bearish for USDCAD ). My bearish outlook remains unchanged, despite higher prices in USDCAD.
Strategy:
Sell USDCAD on rallies
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