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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: Bearish
AUDUSD: Bearish
USDJPY: Bearish
USDCAD: Bearish
EURO – Euro Futures
My Bias: Bullish
Economic data for Euro has been mostly weaker with the economy contracting in the second quarter, investor sentiment (as measured by the German ZEW survey) hitting its lowest level since 2010 and industrial production falling by the steepest amount since November 2019. Eurozone PMIs are scheduled for release and there’s a very good chance that these numbers will come in softer, building the case for EUR/USD to break 1.10. However, euro found support at the end of last week from one very important headline about the German government preparing to boost government spending if the economy falls into recession.
Positions:
Speculators took profits this week. They covered 10.7K of their long positions and 8.1K of short positions. They were 46.6K net short, which was up from being 44K in the previous week.
The speculative net positions are still trading above 33 weeks moving average and the bias should remain to the upside despite lower prices in EURUSD. As long as this is the case, any dips should be treated as an opportunity to buy EURUSD.
Strategy:
Build up long term long positions. The current decline is an opportunity to buy
GBP – British Pound Future
My Bias: Bearish GBPUSD
GBP/USD rate edged higher last week, with the pairing trading around $1.215 as opposition mounts against a no-deal Brexit increases following Labour leader Jeremy Corbyn call for cross-party unity against Prime Minister Boris Johnson.
The latest Liberal Democrat MP Sarah Wollaston has also appeared to back Jeremy Corbyn, saying that to do so would be ‘the lesser of the two evils’.
Guto Bebb, a former Conservative minister, commented:
‘I do think that those who have said that they will do anything necessary to stop the long-term damage of a no-deal exit must take seriously this type of offer… I certainly take the view that a short-term Jeremy Corbyn government is less damaging than the generational damage that would be caused by a no-deal Brexit.’
Sterling has benefited from the increasing resistance against a no-deal exit from the European Union on October 31.
Positions:
Speculators also took profits in GBP Futures. This week they covered 11K of their longs and 18K of their shorts. They were 95.8K net short, which was down from being 102.7K in the previous week. Speculative positions are extreme and the share of open interest was at 49.7% in the previous week.
Both signals suggest that the current downside in GBPUSD might be getting out of steam and the price is likely to bottom and reverse to the upside fairly soon.
I would like to see a share of open interest over 50% first though. It would definitely add to bullishness.
Strategy:
As expected, the price has been moving lower. More downside ahead.Watch 1.20
JPY -Japanese Yen Futures
My Bias: Bearish USDJPY
Dollar/yen posted considerable gains last week, as the greenback rebounded after two straight weeks of losses. Investors will be keeping a close eye on the Federal Reserve minutes, which will provide details from the July policy meeting, when the Fed lowered rates for the first time in a decade. As well, we can expect trade tensions and stock market movement to have a significant influence on the pair’s movement.
Positions:
Speculators have been dropping their short positions for 4 consecutive weeks now. This week they covered another 8.6K of their shorts and, at the same time they added 5.5K long positions to their portfolios. They were 24K net long, which was significantly up from being 10K net long in the previous week. This makes speculators to be NET LONG for 2nd week and for the first time since Dec 2018. That time, long net positions didn’t hold up and the price of USDJPY kept going up. Let’s see what is it going to do this time.
Strategy – no change:
No strategy for now.
AUD -Australian Dollar Futures
My Bias: Bullish AUDUSD
The Australian dollar has rallied a bit during the trading session on Thursday, showing signs of consolidation just below the crucial 0.68 level which was previous support. At this point I think the market is simply trying to digest the losses and decide whether or not it’s okay to be at this level. Now that we have sat in this area for a while, I think the market will be comfortable with breaking down. After all, we have broken down through a major support level recently, so this of course means that the market has to be comfortable being the slow. Because of this, I think it’s only a matter of time before we break down.
Positions:
Speculators were bearish this week. They covered 6K of their long positions and added fresh 1.3K shorts contracts. They were 62K net short, which was up from being 55K in the previous week.
The speculative positions managed to stay below 33 weeks moving average, which would define a trend as bearish. The falling price action confirms bearish outlook in the short term.
In the longer term, I expect Aussie to bottom soon and take a major swing to the upside.
Strategy:
Look out for long positions on dips
CAD – Canadian Dollar Futures
My Bias: Bullish USDCAD
The Canadian dollar is closing out the week a tad worse for wear, and it is due to factors beyond its control. The currency has been whipped about by lightning-quick shifts in global risk sentiment arising from Washington, Beijing and the U.K., alongside top-tier G-10 economic data. The Canadian dollar and British pound were the only currencies to gain against the U.S. dollar overnight. The Australian dollar was unchanged and the rest lost ground. JPY and CF weakened as risk aversion fears eased.
Positions:
This week speculators also took profits in CAD futures. They covered 13.5K of their long positions and 3.5K of their shorts. They were 14K net long, which was lower from 24K in the previous week.
My previous analysis stands valid: I expect the price to fall after the current rally is completed.
Strategy:
Look out for short positions on rallies.
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