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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: Bullish
USDCAD: Bearish
EURO – Euro Futures
My Bias: Bullish
Euro/dollar is suffering from uncertainty. While a trade deal may boost German exports to China – which have been under stress – it also lowers the chances of another rate cut in the US.
This lose-lose situation may also be attributed to the European Commission’s downgrade of the outlook for the euro-zone. Growth is expected to stand at 1.1% this year and 1.2% in 2020, lower than previous projections. The common currency remains pressured.
European weakness contrasts with upbeat economic figures from the US. The blockbuster Non-Farm Payrolls was followed by a jump in the ISM Non-Manufacturing Purchasing Managers’ Index. And now, another forward-looking indicator is eyed.
The preliminary Consumer Sentiment Index from the University of Michigan carries expectations for a small increase – implying the American shopper would continue pulling the economy forward.
Positions:
This week speculators showed rather bearish outlook. They covered 2.3K of their long positions and added fresh 5K of short contracts. They were 60.7K net short, which was up from 53K in the previous week. The price moved sharply lower last week, which could be a sign of a change in sentiment to the downside. It’s still too early to say and given that speculative net positions are trending above 33 weeks moving average, my bias remains to the upside for now
Strategy:
Buy EURUSD on dips
GBP – British Pound Future
My Bias: Bullish GBPUSD
The pound tanked on Super Thursday, the day that the central gave its monetary policy decision, released the minutes from the monetary policy meeting and updated the market with its quarterly inflation report.
As analysts had forecast, the BoE kept monetary policy unchanged, with interest rates holding steady at 0.75%. In the quarterly inflation report the BoE slashed its economic growth forecasts for the coming years. The central bank cut its 2021 forecast from 2.3% to 1.8%, the 2020 forecast to 1.2% from 1.3% and this year it raised the forecast to 1.4%. The gloomy prognosis for the UK economy resulted in a more dovish stance from the central bank.
Positions:
Speculators took profits this week. They covered 2.1K of their long positions and over 5.5K of their shorts. They were 29K net short, which was less compared to 32K in the previous week. The price traded lower last week but the long term sentiment is looking to the upside with speculative positions trending above 33 weeks moving average. I treat any dips as an opportunity to buy GBPUSD
Strategy:
Buy GBPUSD on dips.
JPY -Japanese Yen Futures
My Bias: Bullish USDJPY
The Dollar/Yen is trading higher on Friday after piercing its August 1 top at 109.317 the previous session on its way to a test of its highest level since May 31. The price action in the Forex pair is mimicking the movement in the benchmark U.S. 10-year Treasury yield, which posted a similar move on Thursday.
The USD/JPY is trading 109.352, up 0.076 or +0.07%.
There are multiple ways to look at the Dollar/Yen. One can follow the Forex pair using U.S. Treasury yields as their guide, or they can follow the news and try to relate it to “risk-on” and “risk-off” scenarios.
Positions:
Speculators added 4.8K of new longs and 11.7K of new shorts to their portfolios. They were 26.6K net short. It was a 3rd consecutive week with speculative positions being bearish. I expect more upside in the price of USDJPY in the coming weeks.
Strategy – no change:
Buy USDJPY on dips
AUD -Australian Dollar Futures
My Bias: Bullish AUDUSD
The Australian dollar, US dollar exchange rate has had a choppy week as the pair responds to the two steps forward one step back nature of the US – China trade deal headlines. The pair was trending lower on Friday, down 0.4% at the time of writing, pulling US$0.6850 into sight.
The Australian dollar (a G7 proxy for China) shrugged off a better than expected trade balance data from China on Friday. China’s trade surplus widened to $42.81 billion in October, ahead of the $40.1 billion that analysts had pencilled in. Imports fell 6.4% year on year in US dollar terms, whilst exports fell 0.9% in US dollar terms but rose in CNY terms.
Positions:
Massive shift in positions this week. Speculators added a whopping 13K of fresh long contracts and covered 492 of their shorts. This is a strong indication of a bullish sentiment among smart money. It is likely to push the price of AUDUSD to the upside in the coming weeks.
Strategy:
Look out for long positions on dips
CAD – Canadian Dollar Futures
My Bias: Bullish USDCAD
Canadian dollar traders are awaiting the Statistics Canada release of the monthly employment report. This report tends to spark a flurry of FX volatility upon release but its impact on day to day trading fades within a couple of days. Today’s announcement will be the ninth report of 2019. Of those reports, seven surprised to the upside, and five of those surprise gains were substantial. The two reports that were below expectations were marginal.
Canada posted a gain of 136,800 jobs between August and September, substantially above the usual job gains for that period. For today, forecasters are predicting a gain of 15,900 jobs with the unemployment rate unchanged at 5.5%. However, the magnitude of the recent job totals raises the risk of a sharply weaker result. Many analysts question the sustainability of the employment gains and suggest that today’s threat is for a sharply weaker than expected result.
As previously noted, Canadian dollar price action is determined by external influences as well as domestic ones, and today is no different. The U.S. dollar is in demand. It rose yesterday and again overnight due to optimistic U.S./China trade expectations. Arguably, the Canadian dollar will respond more aggressively to disappointing employment data, then it will to a strong report.
Positions:
This week speculators added 5.7K new long contracts and covered 4.6K of their shorts. They were 54K net long, which was significantly higher from 43K in the previous week. This week’s long sentiment might push the price of USDCAD to the downside. Any rallies should be treated as an opportunity to sell the pair.
Strategy:
Sell USDCAD on rallies
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