Analys från DailyFX
COT: Extreme in Euro Speculative Longs Grows, Crude Oil Specs Hit Bids
What’s inside:
- Euro large speculators’ net long increases for 6th week in a row, historically big
- Gold large specs reduce long exposure on weakening technical backdrop
- Crude oil traders finally reduce longs after buying into recent weakness
The COT report is an intermediate to long-term indication of sentiment – for a short-term view on sentiment, check out IG Client Sentiment data and our guide on how to utilize this metric.
The Commitment of Traders (COT) report is released each Friday, and it shows market positioning of futures traders as it stands for the week ending on Tuesday. In the table below are the net positions of large speculators (i.e. hedge funds, CTAs, etc.), the change from the prior week, and where the net position stands relative to its 52-week range.
Notable developments: Large speculators in the euro added to their net long position for a 6th week in a row, with an 8th week in a row of net positive change in positioning. Several weeks ago in a prior report, we discussed the successful track record of large speculators catching trends in the euro, but with their net long position extending further towards a historically high level there is reason to be cautious. The technical backdrop for the euro remains somewhat bullish, but if support down to near 11100 were to break there will be plenty of longs who could head for the exit and fuel a decline.
Large specs in gold unloaded a small piece of their rather large net long position during the recent reversal from above the all-important 2011 trend-line. While gold traders have been long for years, the recent net holding of over 200k contracts was the largest since November. With gold in a technically precarious position, trading back below the long-term trend-line, and plenty of sellers available; the yellow metal could be headed for a rough stretch ahead.
Large specs in silver also decreased their positioning, but recently there was a major unwind from a record long position reached in April. At just over 60k contracts, though, net positioning still sits in the upper bounds of what we’ve seen historically.
Crude oil specs, despite declining prices, added to their net long position for several weeks up until recently. The most recent report shows a 23k contract drop in net long exposure as oil continues its run of weakness. At 359k contracts it’s still a large position. The decline from record positioning in February at 557k contracts may be poised to continue, and with it lower oil prices for the foreseeable future.
Other futures contracts and large speculator positioning:
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—Written by Paul Robinson, Market Analyst
You can receive Paul’s analysis directly via email by signing up here.
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
To be added to Christopher’s e-mail distribution list, please fill out this form
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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