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CoT Highlights:

  • USD bullish bets mixed, Euro net-short keeps growing
  • Crude oil large specs continue hitting bids amid sharp decline
  • Large speculator profile updates for other major currencies/markets

See the IG Client Sentiment pagefor a timelier look at sentiment in major currencies and markets.

Friday’s CoT report showed a mixed bag with regards to Dollar bullish bets. There were reductions versus the Canadian Dollar, Japanese Yen, New Zealand Dollar, and Australian Dollar, while more buying took place in the DXY index and against the Euro, Pound, and Swiss Franc. Amidst crude oil’s precipitous decline large speculators continue to hit bids at an aggressive but not ‘panicky’ pace; big trend support coming up.

On Fridays the CFTC releases a detailed report of traders’ positioning in the futures market as reported for the week ending on Tuesday. Outlined in the table below are key stats concerning the positioning of large speculators (i.e. hedge funds, CTAs, etc.), excluding small speculators and commercial traders.

‘Large specs’ are known to typically employ trend-following strategies, and as such, they tend to add to long positions and reduce shorts in uptrends while reducing long positions and increasing shorts in downtrends. When analyzing the data, we take into consideration the direction of their position, magnitude of changes, as well as extremes.

Key stats: Net position, one-week change, and where the current position stands relative to the past 52 weeks.

CFTC CoT data table

USD bullish bets mixed, Euro net-short keeps growing

Large specs have been adding to bullish US Dollar Index (DXY) bets at an impressively persistent pace. Their net-long increased for the 27th time in 29 weeks. In the Euro, it was the 6th week in a row the net-short grew. At nearly -47k contracts it is the shortest large specs have been since the early-part of last year. Today, the important 11300 level I discussed over the weekend broke. More losses look to be in store in the short-term, at the least.

Euro Positioning Chart

Euro large speculators' positioning

EUR/USD Price Chart (Trading below 11300)

eur/usd daily price chart, 11300 level

Crude oil large specs continue hitting bids amid sharp decline

As one would expect given the large decline in oil, large specs have been hitting bids at an aggressive clip. The 4-week change of -124k contracts has only been exceeded on 2 other occasions, once in each of the past 2 years. But given the size of the drop one might think selling would have been even more aggressive (perhaps that is yet to come).

There is a very important trend-line just below, extending off the notable February 2016 low. Given how fierce the decline has been a bounce looks likely on a first test of long-term trend support, but should it break at some point longs could really start hitting bids at a ‘panicky’ pace.

Crude Oil Positioning Chart (Feb ’16 t-line near)

Crude oil positioning chart, Feb '16 t-line near

See what fundamental and technical drivers are at work in the Q4 Trading Forecasts.

US Dollar Index (DXY)

Weekly CoT Update for USD, Euro, Crude Oil & More

British Pound

Weekly CoT Update for USD, Euro, Crude Oil & More

British Pound

Weekly CoT Update for USD, Euro, Crude Oil & More

Canadian Dollar

Weekly CoT Update for USD, Euro, Crude Oil & More

Swiss Franc

Weekly CoT Update for USD, Euro, Crude Oil & More

Australian Dollar

Weekly CoT Update for USD, Euro, Crude Oil & More

Australian Dollar

Weekly CoT Update for USD, Euro, Crude Oil & More

Gold

Weekly CoT Update for USD, Euro, Crude Oil & More

Copper

Weekly CoT Update for USD, Euro, Crude Oil & More

S&P 500 (E-mini)

Weekly CoT Update for USD, Euro, Crude Oil & More

Resources for Forex & CFD Traders

Whether you are a new or experienced trader, we have several resources available to help you; indicator for tracking trader sentiment, quarterly trading forecasts, analytical and educational webinars held daily, trading guides to help you improve trading performance, and one specifically for those who are new to forex.

---Written by Paul Robinson, Market Analyst

You can follow Paul on Twitter at @PaulRobinsonFX