News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Bearish
Oil - US Crude
Mixed
Wall Street
Mixed
Gold
Bullish
GBP/USD
Bearish
USD/JPY
Bearish
More View more
Real Time News
  • Indeed... because my report was posted many hours ago https://t.co/SKzJUGRG9h
  • And a great guest you were too. Thank you! https://t.co/noZQNreeEF
  • USD/CAD trades to a fresh monthly high (1.3390) as the US Dollar appreciates on the back of waning risk appetite. Get your market update from @DavidJSong here:https://t.co/1su6hczNz3 https://t.co/9PqqeS7Seb
  • Commodities Update: As of 18:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: 0.45% Silver: 0.15% Gold: -0.38% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/ZbuJCtwSLe
  • Crude Oil Forecast: WTI Crude Oil Sinks to Fresh Four-Month-Lows https://www.dailyfx.com/forex/fundamental/daily_briefing/session_briefing/daily_fundamentals/2020/10/29/Crude-Oil-Price-Forecast-WTI-Crude-Oil-Sinks-to-Fresh-Four-Month-Lows.html https://t.co/VZkDC7TZ3t
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.31%, while traders in NZD/USD are at opposite extremes with 68.35%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/InT3aJBPqT
  • Indices Update: As of 18:00, these are your best and worst performers based on the London trading schedule: US 500: 1.46% Wall Street: 0.86% FTSE 100: 0.67% France 40: 0.62% Germany 30: 0.60% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/gQnHmoLx2Q
  • Commodities Update: NYM WTI Crude 36.22 (-3.13%), ICE Brent Crude 37.79 (-3.35%), NYM NYH Gasoline 104.69 (-3.19%). [delayed]
  • #Gold Price Forecast: $XAUUSD Pre-Election Breakdown to Monthly Lows - https://t.co/qfEko0woN7 https://t.co/vvWdrxOQMP
  • ECB sources - policymakers favoured more bond purchases, others TLTRO and others a mix of both $EUR
EUR/USD Vulnerable to Setback Amid Overbought Positioning  - COT Report

EUR/USD Vulnerable to Setback Amid Overbought Positioning - COT Report

2020-10-12 09:30:00
Justin McQueen, Analyst
Share:

US Dollar, EUR/USD, USD/JPY, COT Report –Analysis

  • Euro Setback Risk Lingers as Positioning Remains in Overbought Territory
  • GBP/USD Bears Ease
  • Commodity Currencies Signal Reflation Theme is Alive

The Predictive Power of the COT Report

How to Read the CFTC Report

EUR/USD Vulnerable to Setback Amid Overbought Positioning  - COT Report

Source: CFTC, DailyFX (Covers up to October 6th, released October 9th)

Advertisement

Euro Vulnerable to Setback Amid Overbought Positioning - COT Report

In the week September 30th-October 6th, the latest CFTC data continued show to a squeeze in USD shorts, which saw a reduction of $2bln against G10 currencies. Keep in mind however, that this does not take into account the 1% fall in the DXY after the reporting week. Alongside this, while overall bearish bets in the USD is at a two month low, positioning remains sizeable.

USD Forecast
USD Forecast
Recommended by Justin McQueen
Download our fresh Q4 USD Forecast
Get My Guide

The bulk of the positioning change had been observed in the Euro as net longs were slashed by $2bln with gross longs liquidated and gross shorts picking up slightly. That said, with Euro positioning in overbought territory, there remains a persistent risk that the Euro is vulnerable to pullbacks, particularly as the ECB continue to fret over the strength of the Euro. However, with markets pricing in a democrat sweep in the US election, investors appear reluctant to depart with their significant exposure in the Euro.

Net shorts in the Pound eased slightly as optimism over a EU-UK trade deal continues to grow. Despite both parties stating that significant gaps persist. Beyond the headlines there is a sense that progress is being made and given that investors sit on the short side, a breakthrough can see the GBP/USD jump to 1.32-1.33 with EUR/GBP falling below 0.88. Elsewhere, across the commodity currencies, the reflation theme had been evident with investors buying up high-beta currencies as odds of a Biden presidency increased.

How to Use IG Client Sentiment in Your Trading
How to Use IG Client Sentiment in Your Trading
Recommended by Justin McQueen
Improve your trading with IG Client Sentiment Data
Get My Guide
EUR/USD Vulnerable to Setback Amid Overbought Positioning  - COT Report

US Dollar |

EUR/USD Vulnerable to Setback Amid Overbought Positioning  - COT Report

EUR/USD |

EUR/USD Vulnerable to Setback Amid Overbought Positioning  - COT ReportEUR/USD Vulnerable to Setback Amid Overbought Positioning  - COT Report

GBP/USD |

EUR/USD Vulnerable to Setback Amid Overbought Positioning  - COT ReportEUR/USD Vulnerable to Setback Amid Overbought Positioning  - COT Report

USD/JPY |

EUR/USD Vulnerable to Setback Amid Overbought Positioning  - COT ReportEUR/USD Vulnerable to Setback Amid Overbought Positioning  - COT Report

USD/CHF |

EUR/USD Vulnerable to Setback Amid Overbought Positioning  - COT ReportEUR/USD Vulnerable to Setback Amid Overbought Positioning  - COT Report

USD/CAD |

EUR/USD Vulnerable to Setback Amid Overbought Positioning  - COT ReportEUR/USD Vulnerable to Setback Amid Overbought Positioning  - COT Report

AUD/USD |

EUR/USD Vulnerable to Setback Amid Overbought Positioning  - COT ReportEUR/USD Vulnerable to Setback Amid Overbought Positioning  - COT Report

NZD/USD |

EUR/USD Vulnerable to Setback Amid Overbought Positioning  - COT ReportEUR/USD Vulnerable to Setback Amid Overbought Positioning  - COT Report

For a more in-depth analysis on FX, check out the FX Forecast

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES