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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: Bearish
GBPUSD: Bullish
AUDUSD: Bearish
USDJPY: Bullish
USDCAD: Bearish
EURO – Euro Futures
My Bias: Bearish
Data released the Thursday favoured the slide, as Germany final CPI came in as expected and as previously estimated, while US inflation came in better than expected in the same month. Annual CPI in the country hit 2.5%, while the core reading resulted at 2.3%. This Friday, Germany and the EU will release their preliminary estimates of Q4 GDP. German’s growth is foreseen at 0.1% in the three months to December, while for the Union the forecast is of 0.1%. The US will publish January Retail Sales and the February preliminary estimate of the Michigan Consumer Sentiment Index, foreseen at 99.5 from 99.8 final in January.
Positions:
This week speculators added 2.5K new long positions and 13K short positions to their portfolios. They were 85.6K net short, which was up from being 75K net short in the previous trading week. It’s worth noting that speculators covered 13.7K of their longs in the previous week.With new 13K short this week, we have a very serious bias to the downside for EURUSD. The price action confirms bearish outlook. I expect EURUSD to keep falling from here.
Strategy:
Sell EURUSD on rallies.
GBP – British Pound Future
My Bias: Bullish GBPUSD
Markets reacted positively to Sajid Javid’s surprise resignation from the role of Chancellor, driving the Pound Sterling to US Dollar (GBP/USD) exchange rate sharply higher.
Although the move creates the potential for fresh political uncertainty, coming mere weeks ahead of the Budget announcement, this failed to weigh on Pound Sterling (GBP) on Thursday morning.
With markets now expecting to see Downing Street exert still greater influence over the Treasury the prospect of increased spending gave GBP exchange rates a boost.
Investors took further encouragement from the unexpectedly strong nature of January’s RICS house price balance, which surged 17% on the month.
Positions:
This week speculators covered 5.3K of their long positions and added fresh 2.7K of shorts. They were 13K net long, which was down from being 21K in the previous week. This week’s positions are rather bearish but all metrics suggest that GBPUSD will sustain upwards movement. My outlook does not change here. I am GBP bullish
Strategy:
Buy GBPUSD on dips.
JPY -Japanese Yen Futures
My Bias: Mixed USDJPY
The Dollar/Yen finished higher last week, backed by strong buying throughout the week before suffering a mild set-back on Friday. Most of the strength during the week was fueled by a jump in demand for higher risk assets, which encouraged investors to shed positions in the safe-haven Japanese yen. Stronger-than-expected U.S. economic data also contributed to the rally although investor chose to ignore a strong U.S. jobs report on Friday.
Last week, the USD/JPY settled at 109.782, up 1.426 or +1.32%.
Positions:
Speculators have been JPY bullish for 3 weeks now. This week they added new 2.8K long positions and covered 1.4K of their shorts. They were 22K net short, which was down from being 26K in the previous week. The price action is trending to the upside so it looks like the speculators are getting caught on the wrong side of the market. This doesn’t happen often and the speculative bias eventually prevails. Its too early to say but perhaps the upside in USDJPY could be limited.
Strategy – no change:
Pause
AUD -Australian Dollar Futures
My Bias: Bearish AUDUSD
While the Australian economy is bracing for a hit from the respiratory disease in its top trading partner, investors perceive the damage to being contained. After dipping to decade lows, the Aussie has recovered.
A closer neighbor also had a positive effect on the A$. The Reserve Bank of New Zealand published forecasts that consisted of no rate cuts through 2020 – causing a surge in the kiwi and carrying the Aussie higher as well.
Across the Pacific, Jerome Powell, Chairman of the Federal Reserve, also seemed upbeat and contributed to the upbeat mood. While he said that the Fed is monitoring any spillovers from the virus, he saw no reason to see the expansion coming to an end.
Positions:
Speculators keep piling up on short AUD futures. This week they added another 11K of new short positions and left their longs unchanged. They were 43K net short, which was way up from being 32K in the previous week. I expect the current downtrend to continue.
Strategy:
Sell AUDUSD on rallies
CAD – Canadian Dollar Futures
My Bias: Bullish USDCAD
Spot USD/CAD climbed an impressive 2% year-to-date, but the Canadian dollar has begun to recover from recent downside amid fading coronavirus fears
The Canadian dollar could continue rebounding and drive USD/CAD price action toward chart support after another hard rejection at a major zone of technical resistance
Retail forex trader positioning on USD/CAD is at extremes and is experiencing a dramatic shift according to a recent IG Client Sentiment Report
The loonie has moved broadly lower over the last month and a half with USD/CAD surging about 260-pips since the December 31 close.
Downward pressure exerted on the Canadian dollar relative to the greenback can be largely attributed to an influx of risk-aversion and volatility resulting from the novel coronavirus outbreak in Wuhan, China.
Positions:
Speculators took profi this week. They covered 1K of their long positions and 10K of their short positions. They were 18K net long, which was up from being 10K in the previous week. The price action pointing to the upside but the speculative positions suggest the top could be close and more downside will be likely
Strategy:
Sell USDCAD on rallies
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