Analys från DailyFX
COT: Gold, Silver, Australian Dollar Large Spec Profiles Warn of Weakness
What’s inside:
- Gold silver large speculators continue aggressive buying, suggests more struggles ahead
- Australian dollar large specs have relatively large position at resistance, correlated to precious metals
- Futures positioning profile charts for major currencies markets
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Every Friday the CFTC releases the Commitment of Traders (COT) report, which shows traders’ positioning in the futures market as it stands for the week ending on Tuesday. In the table below are net positions of large speculators (i.e. hedge funds, CTAs, etc.); the change in their positioning from the prior week and where it stands relative to its 52-week range.
Noteworthy developments
Gold/silver – Last week, we were discussing the aggressive pace of buying among large speculators in the gold market, and how reaching a certain threshold has coincided with the precious metal struggling to tack on further gains when looking out over a few weeks. In the past two months, large specs have increased their net-long at a clip which took the total size from the smallest in the past year to just under the largest.
Unsurprisingly, we are seeing similar activity in the silver market. At the current clip of buying it wouldn’t take long to reach the record long of 103k contracts long seen back in April. Look for gains from current levels to struggle to be maintained until we see easing in price and/or market positioning. Check out this piece for the most recent silver short-term technical outlook.
Australian dollar – Aussie large speculators have taken a break the past couple of weeks as net-buyers and did some light selling instead. Overall, though, their net long position of 63k contracts is still the largest position held since April 2013. What is of most interest, is the fact the position extreme comes at a time when the price of AUDUSD is up against long-term resistance. The combination begs the question; is there enough ammunition left to push it through?
Precious metals and AUDUSD have a long-term correlation to one another which is quite strong. Aussie and gold currently have a 52-week correlation of 73%, and it hasn’t been in negative territory since May 2012. We’re likely to see both the currency and metal struggle at the same time in the weeks ahead.
AUDUSD/Gold: Weekly
The COT report is a longer-term sentiment indicator – for a short-term view on sentiment, check out IG Client Sentiment data.
Other futures contracts and large speculator positioning:
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—Written by Paul Robinson, Market Analyst
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You can follow Paul on Twitter at @PaulRobinonFX.
What’s inside:
- EURUSD broke the ‘neckline’ of a bearish ‘head-and-shoulders’ pattern, April trend-line
- Resistance in vicinity of 11825/80 likely to keep a lid on further strength
- Targeting the low to mid-11600s with more selling
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Coming into last week we pointed out the likelihood of finally seeing a resolution of the range EURUSD had been stuck in for the past few weeks, and one of the outcomes we made note of as a possibility was for the triggering of a ’head-and-shoulders’ pattern. Indeed, we saw a break of the ’neckline’ along with a drop below the April trend-line. This led to decent selling before a minor bounce took shape during the latter part of last week.
Looking ahead to next week the euro is set up for further losses as the path of least resistance has turned lower. Looking to a capper on any further strength there is resistance in the 11825-11880 area (old support becomes new resistance). As long as the euro stays below this area a downward bias will remain firmly intact.
Looking lower towards support eyes will be on the August low at 11662 and the 2016 high of 11616, of which the latter just happens to align almost precisely with the measured move target of the ‘head-and-shoulders’ pattern (determined by subtracting the height of the pattern from the neckline).
Bottom line: Shorts look set to have the upperhand as a fresh month gets underway as long as the euro remains capped by resistance. On weakness, we’ll be watching how the euro responds to a drop into support levels.
For a longer-term outlook on EURUSD, check out the just released Q4 Forecast.
EURUSD: Daily
—Written by Paul Robinson, Market Analyst
You can receive Paul’s analysis directly via email bysigning up here.
You can follow Paul on Twitter at@PaulRobinonFX.
Why and how do we use IG Client Sentiment in trading? See our guide and real-time data.
EURUSD: Retail trader data shows 37.3% of traders are net-long with the ratio of traders short to long at 1.68 to 1. In fact, traders have remained net-short since Apr 18 when EURUSD traded near 1.07831; price has moved 9.6% higher since then. The number of traders net-long is 15.4% lower than yesterday and 16.4% higher from last week, while the number of traders net-short is 0.4% higher than yesterday and 10.5% lower from last week.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests EURUSD prices may continue to rise. Positioning is more net-short than yesterday but less net-short from last week. The combination of current sentiment and recent changes gives us a further mixed EURUSD trading bias.
— Written by Christopher Vecchio, CFA, Senior Currency Strategist
To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com
Follow him on Twitter at @CVecchioFX
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Why and how do we use IG Client Sentiment in trading? See our guide and real-time data.
GBPUSD: Retail trader data shows 38.2% of traders are net-long with the ratio of traders short to long at 1.62 to 1. In fact, traders have remained net-short since Sep 05 when GBPUSD traded near 1.29615; price has moved 3.4% higher since then. The number of traders net-long is 0.1% higher than yesterday and 13.4% higher from last week, while the number of traders net-short is 10.6% lower than yesterday and 18.3% lower from last week.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests GBPUSD prices may continue to rise. Yet traders are less net-short than yesterday and compared with last week. Recent changes in sentiment warn that the current GBPUSD price trend may soon reverse lower despite the fact traders remain net-short.
— Written by Christopher Vecchio, CFA, Senior Currency Strategist
To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com
Follow him on Twitter at @CVecchioFX
To be added to Christopher’s e-mail distribution list, please fill out this form
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