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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: Bearish
USDJPY: Mixed
USDCAD: Bearish
EURO – Euro Futures
My Bias: Bullish
The Euro to US Dollar (EUR/USD) exchange rate is mostly rangebound this afternoon as markets digest the latest Eurozone and US Data.
At the time of writing the EUR/USD exchange rate is trading at around $1.1027, virtually changed from this morning’s opening rate.
Euro (EUR) Steady as German Inflation Accelerates
The Euro (EUR) is holding its ground this afternoon as markets react to Germany’s latest consumer price index (CPI).
According to data published by Destatis, headline inflation accelerated from 1.5% to 1.7% in January as expected.
This was the strongest reading of inflation since July and brings it closer to the European Central Bank’s (ECB) target rate of 2%.
Positions:
Speculators added to both sides of the trade this week. They opened fresh 12.4K long positions and 24.2K of short positions. They were 59K net short, which was down from 47K in the previous trading week. Overall this week’s positions look bearish but the net speculative positions remain above 33 weeks moving average, which defines longer term uptrend. Despite bearish outlook this week, EURUSD spiked to the upside, confirming the main trend remains upwards. I expect higher prices to follow
Strategy:
Buy EURUSD on dips
GBP – British Pound Future
My Bias: Bullish GBPUSD
Mark Carney’s final meeting as Governor of the Bank of England was dramatic, as analysts were split over whether the BoE would lower the benchmark rate on Thursday. There was a 45% likelihood that the bank would trim rates to 0.50%, but in the end, policymakers opted stayed on the sidelines. The vote to maintain rates at 0.75% was 7-2, compared to the 6-3 vote last month. This was a surprise, as many analysts and investors had expected a closer vote or even a rate cut. In the end, the BoE was of the opinion that global growth was improving. At the same time, Carney noted that “although the global economy looks to be recovering, caution is warranted”. Investors gave a thumbs-up to the pound after the decision not to cut rates, and GBP/USD has gained close to 1 percent since the BoE announcement.
Positions:
This week speculators covered 2.4K of their long positions and added fresh 4.8K of short positions. This bearish behaviour was also noted in the previous week. Speculators were 18K net long, down from being 25K in the previous week, how ever they remain net long for a 4th consecutive week. My bias remains to the upside. We have been eyeballing Cable for the last few weeks as the bullish sentiment unravelled.
Strategy:
Buy GBPUSD on dips.
JPY -Japanese Yen Futures
My Bias: Mixed USDJPY
Asian markets continue to struggle due to the outbreak of the coronavirus. This does not seem to be affecting the Japanese Yen, which continues to strengthen against the US dollar. The currency pair has been on a bearish run since the news of the coronavirus broke two weeks ago.
Besides the coronavirus outbreak, Japan released a series of economic figures during the week. On Wednesday, the Consumer Confidence Index for January missed the expectation of 40.8 with 39.1. And on Thursday’ Tokyo CPI ex-Fresh food for January came short of the (YoY) expectation of 0.8% with 0.7%. The general CPI missed 0.9% with 0.6% for the same period while CPI exp-food and energy was in line with expectations at 0.9%.
Positions:
This week speculators took profits. They covered 5K of their long positions and 13.5K of their short positions. They were 36K net short, down from being 44.7K in the previous week. The spot price has been lower but the main trend remains to the upside.
Strategy – no change:
Buy USDJPY on dips
AUD -Australian Dollar Futures
My Bias: Bearish AUDUSD
AUD/USD has posted slight gains on Friday. The pair is currently trading at 0.6712, down 0.10% on the day. The pair lost more ground on Thursday and is down 1.6% on the week, as the coronavirus has dampened risk appetite. PPI ticked lower to 0.3% in Q4, compared to 0.4% in Q3. Although this matched the forecast, this was the lowest reading since Q2 of 2018. Also, Private Sector Credit ticked higher to 0.2%, up from 0.1%. This matched the estimate.
Positions:
Speculators added new 2.3K of their long positions and at the same time they added fresh 10.5K shorts. They were 27.5K net short vs 19K in the previous week. The AUDUSD declined sharply last week and given the massive amount of speculative short positions added this week, the downmove might extend further. I advise to pause trading on AUD and see what the market will do this week.
Strategy:
Pause
CAD – Canadian Dollar Futures
My Bias: Bullish USDCAD
The Canadian dollar had a rough time of it overnight. It closed at its best level for Thursday’s session, but things went pear-shaped in Asia. The Australian and New Zealand dollars reacted poorly to the World Health Organization’s (WHO) declaration that the Wuhan coronavirus outbreak was a “Global Emergency.” Its statement praised China for its efforts at containment. It said “The Committee emphasized that the declaration of a PHEIC should be seen in the spirit of support and appreciation for China, its people, and the actions China has taken on the frontlines of this outbreak, with transparency, and, it is to be hoped, with success. In line with the need for global solidarity, the Committee felt that a global coordinated effort is needed to enhance preparedness in other regions of the world that may need additional support for that.”
Positions:
Speculators added 1.9K new long positions and 5.6K of shorts. They were 35K net long , which was changed from 38K in the previous week. This is a fairly bearish picture confirmed by higher prices in USDCAD. My bias is still to the upside for USDCAD as speculators are overall strongly bearish in CAD futures
Strategy:
Sell USDCAD on rallies
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