Euro Extremely Bullish According to COT

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The COT Index is the percentile of the difference between net speculative positioning and net commercial positioning measured over the last 52 weeks.  A reading close to 0 suggests that a bottom is forming and a reading close to 100 suggests that a top is forming.  The readings are for the actual currency, not the currency pair.  For example, a reading of 100 on the Canadian Dollar suggests that the Canadian Dollar is close to a top (USDCAD close to a bottom).

Readings of 95 and higher as well as 5 and lower are in boldfaced red type to indicate potential market extremes.  The last 4 weeks of the COT Index are shown because it is just as important to know where the index is coming from.  For example, an increasing index is bullish until the index is extreme (near 100), at which time the risk of a reversal or pause in the trend increases.    

Explanation of Charts (in order from top to bottom):

Commercial % Long:  # COMMERCIAL LONG CONTRACTS / (TOTAL # COMMERCIAL CONTRACTS) and measured with a 52 week percentile…commercials are very long at the bottom and very short at the top

Speculative % Long:  # SPECULATIVE LONG CONTRACTS / (TOTAL # SPECULATIVE CONTRACTS) and measured with a 52 week percentile …speculators are very long at the top and very short at the bottom

52 Week COT Index: see description just below the COT Index table

13 Week COT Index: see description just below the COT Index table

US Dollar Index: The % of total commercial positions that are long measured through a 52 week percentile is at 14 and the % of total speculative positions that are long measured through a 52 week percentile is at 78.  The indicators are trending down, indicating potential for additional weakness.

Signal: Bearish

EUR: The % of total commercial positions that are long measured through a 52 week percentile is at 98 and the % of total speculative positions that are long measured through a 52 week percentile is at 0.  The 52 and 13 week COT indexes are also both at 0.  Readings this low are extremely bullish.

Signal: Bullish

GBP: The % of total commercial positions that are long measured through a 52 week percentile is at 90 and the % of total speculative positions that are long measured through a 52 week percentile is at 8.  Cable has turned from a bearish sentiment extreme and should continue to gain.

Signal: Bullish

CHF: The % of total commercial positions that are long measured through a 52 week percentile is at 12 and the % of total speculative positions that are long measured through a 52 week percentile is 88.  Sentiment regarding the CHF appears to have turned from a bullish extreme a few weeks ago, so favor CHF weakness, especially against the GBP and EUR.

Signal: Bearish

JPY:  The % of total commercial positions that are long measured through a 52 week percentile is at 0 and the % of total speculative positions that are long measured through a 52 week percentile is at 98.  The 52 week COT index also at 98, indicating that a bullish sentiment extreme has been registered.  After reaching a bullish sentiment extreme, favor the downside (very bullish for EURJPY and GBPJPY)

Signal: Bearish

CAD:  The % of total commercial positions that are long measured through a 52 week percentile is at 75 and the % of total speculative positions that are long measured through a 52 week percentile is at 22.  The 13 week COT index is at 0, so probability is strong that the CAD continues to gain.

Signal: Bullish

AUD:  The % of total commercial positions that are long measured through a 52 week percentile is at 75 and the % of total speculative positions that are long measured through a 52 week percentile is at 8.  The 52 and 13 week COT indices are at 10 and 25.  All indicators have turned up from close to bearish extremes, so favor the upside. 

Signal: Bullish

NZD:  The % of total commercial positions that are long measured through a 52 week percentile is at 59 and the % of total speculative positions that are long measured through a 52 week percentile is at 25.  The 52 and 13 week COT indices are at 16 and 33.  There is not a clear signal provided for Kiwi right now.

Signal: Neutral