Weekly COTS Report - 18th March 2019
Matt Simpson March 18, 2019 12:47 AM
A summary of the weekly Commitment of Traders Report (COTS) from CFTC to show market positioning among large speculators.
- Among the FX majors, it was again JPY futures which saw the largest weekly net change, with net-short exposure increasing by 7.5k contracts. Only minor adjustments were made elsewhere for FX.
- NZD extends net-long exposure after flipping to net-long 3 weeks ago. Note that we’ve adjusted the net-positioning relative to open interest (volume) to more easily compare sentiment on a relative basis between high and low-volume markets (ie EUR and NZD).
- Traders extended net-short exposure on JPY, adding weight to the argument sentiment has seen a cycle high. It’s also worth noting the reduction of short exposure on CHF these past three weeks, which begs the question as to whether long CHF/JPY could come into play.
USD:US dollar exposure is at its highest level against G10 currencies in 6-weeks, having increased for a third consecutive week to $29 bln. Still, the US dollar index (DXY) is struggling near its highs and produced a bearish inside week after failing to break above 97, and remains to look weak technically over the near-term.
JPY: Traders are net-short at their most bearish level in 9 weeks. However, this bearish extension is off the back of long closure and not a round of freshly initiated short bets. This makes the ‘bearish move’ less compelling, along with the fact yen futures have failed to break lower. In fact, both longs and shorts have closed out to see volumes move lower among large speculators.
NZD:Net-long exposure moves to an 8-month high. Fuelled mostly by short-covering, short closure accounted for 10 times the amount of new bullish bets. Still, at just 21k contract net-long, bulls are hardly at dizzy heights, therefore far from a sentiment extreme. But if long interest picks up then we could be on the lookout for a bullish breakout on NZD/USD.
Gold: Net-long exposure was reduced by 9.2k contracts, after bears initiated 11.8k fresh short contracts last week. Keeping in mind the report was ahead of Thursday’s bearish engulfing candle below resistance, so we’d expect short interest to have picked up a little since then.
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.