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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 Euro advanced strongly on the Dollar early last week but was lower against its almighty rival by the close on Friday, although it’s now near to a key support level on the charts and will driven mostly in the coming days by economic data and other developments on the opposite side of the Atlantic.
Europe’s single currency was able to exploit softness in the Dollar early on in a week where the news agenda quickly came to be dominated by rising and then falling tensions between the U.S. and Iran. However, that early bounce in the exchange rate may simply have been the Dollar taking a breather after a strong performance into year-end because the greenback quickly got the better of its continental counterpart heading into mid-week.
Positions:
Speculators took profits in the first trading week of 2020. They covered 542 long positions and over 4.5K short positions. This is fairly bullish bias, although I would like to see smart money buying Euro Futures to be 100% sure. They were 61.6K net bearish, which was down from being 66K in the previous trading week. This is another bullish signal. The price action is trending up and the current correction downwards could be an opportunity to buy EURUSD.
Strategy:
Buy EURUSD on dips
GBP – British Pound Future
My Bias: Bullish GBPUSD
Mixed speculation over central bank policy outlooks ultimately left the Pound to Dollar exchange rate outlook volatile towards the end of last week’s trade session.
While the Pound was boosted by hopes that the UK outlook would improve in 2020 and the US Dollar was weakened by underwhelming US job figures, the US Dollar continued to find support in global risk movement and this kept it appealing towards the end of the week.
While the Pound was strong against many major rivals last week, it was ultimately unable to hold its ground against a rebounding US Dollar.
Positions:
Speculators are all in buying GBP Futures. This week they added another 8K of long positions and covered 16.5K of their short positions. They were 16.5K net LONG. They are officially NET LONG for the first time since December 2018.
This is an excellent opportunity to start thinking of long term long positions in GBP. It seems that the worst around Brexit is behind us. No matter the outcome, the market seems to have more confidence given the recent events. Speculators becoming bullish for the first time in two years is a strong indication that the “big bucks” are going into long GPB.
Strategy:
Buy GBPUSD on dips.
JPY -Japanese Yen Futures
My Bias: Mixed USDJPY
Buyers are still in control of the pair as price keeps around 109.55-60 during European morning trade so far. All the anticipation is on the US non-farm payrolls data later at 1330 GMT.
Once again, the data will offer rather asymmetric risks to the dollar in general. The thinking here is that any major hiccups may present a case for a weaker US economic outlook and possibly room for the Fed to act i.e. more rate cuts perhaps.
Meanwhile, on the flip side, it’s all about wages data in gauging whether or not that can translate into any meaningful inflation pressures to change the current line of thinking at the Fed. But the threshold for any significant pricing for that is really, really high.
As such, a more positive jobs report may keep the dollar more steady with upside gains likely to be more measured. However, a really poor report could spur risk aversion and threaten a more pronounced drop in the greenback.
Positions:
We have a bit of a roller coaster in JPY futures this week. The events around Iran vs US left the currency under a lot of pressure. Speculators added 4.4K new long positions and covered 25.3K of their shorts. This is very bullish for JPY ( bearish for USDJPY pair ). Speculators were 12K net short – this is down from being 42K net short in the previous week ( massive jump )
The price action shows different picture with USDJPY closing last week near the 6 months high @ around 109.50. I would pause on this one for now. Wait and see how the Iran thing will progress in the next week or two.
Strategy – no change:
Pause
AUD -Australian Dollar Futures
My Bias: Bullish AUDUSD
After spending the past seven trading sessions in the red, the Australian dollar was gaining ground versus the US dollar across the European session on Friday. At the time of writing the Aussie dollar was trading 0.45% higher at US$0.6888.
Data published by the Australian Bureau of Statistics showed that Australian retail sales rose by 0.9% month on month, striking its best level in 9 months. This was well ahead of October’s 0.1% increase and analysts’ expectations of a 0.4% rise and as such helped the Australian dollar gather strength after its recent losses.
Positions:
Speculators were bullish after taking profits before Christmas. They added almost 19K of fresh long positions and covered 560 of their shorts. They were 27K net short, which was down from a massive 46K in the previous trading week. The price action is trending up and my bias remains to the upside.
Strategy:
Buy AUDUSD on dips.
CAD – Canadian Dollar Futures
My Bias: Bullish USDCAD
It was a winning week for USD/CAD for the first time in six weeks. The upcoming week has just three events. Here is an outlook at the highlights and an updated technical analysis for USD/CAD.
In Canada, construction data missed expectations. Housing starts dipped to 197 thousand, shy of the estimate of 212 thousand. Building permits posted a third straight decline, falling 2.4 percent. This missed the estimate of 1.0 percent. However, employment numbers sparkled in December. The economy created 35.2 thousand jobs, rebounding after a sharp decline of -71.2 thousand a month earlier. The unemployment rate fell to 5.6%, down from 5.9% in November.
Positions:
Speculators loaded up on both sides of transactions. They added 21K of long positions and 6K of shorts. They were 26K net long, which was up from being 11K in the previous trading week. The increase in bullish bias/long positions and the downwards trending price action in USDCAD are clear indications of more downside to play out.
Strategy:
Sell USDCAD on rallies
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