Weekly COT Report - 22nd April 2019
Matt Simpson April 22, 2019 3:03 AM
A summary of the weekly Commitment of Traders Report (COT) from CFTC to show market positioning among large speculators.
As of Tuesday the 16th of April:
- Traders were net-long the US dollar by $28.7bn, the highest level since the end of January.
- GBP flipped to net long for the first time since June 2018.
- Improved risk appetite saw less demand for CHF and JPY, with traders now the most net-short since September ’18 and January ‘19, respectively.
- JPY saw the largest net weekly change among FX majors, seeing short interest increase by 15.6k contracts.
Seeing GBP traders flip to net-long for the first time since June 2018 is certainly a milestone, given the negative sentiment surrounding Brexit. Yet that’s its seen on very low volumes (across all trader groups) undermines it somewhat. That said, gross longs moved to their most bullish level this year which could become a positive development, as the route to net-long exposure has mostly been fuelled by short-covering. Over the near-term, GBP’s direction may remain difficult to decipher until we see more evidence of an established trend, powered by volume.
JPY: Net-short exposure moves to its most bearish level since early January, with newly initiated gross shorts outpacing long bets by a factor of 2.3 to 1. With 27.5k gross shorts added, it’s the largest weekly change since October for bears. Interestingly, prices remain supported but we suspect a breakout on USD/JPY could be pending, if risk-appetite continues to allow.
- Gross short positioning on WWTI drops to its lowest level since 2005
- Gold’s net-long exposure fell by -49.1k contracts, its largest fall since December 2017.
- Silver’s bullish positioning as its weakest since this year and close to net-short.
- Aluminium remains net-short for a 2nd consecutive week and is at its most bearish level since Jan 2017. The weekly chart remains elevated around $3 with a bearish pinbar candle.
Net-long exposure on WTI is at its most bullish level since October 2018 (although, adjusted for open interest it has nudged lower over the past week). With gross short positioning at its lowest level since 2005, sentiment for crude remains clearly bullish without it appearing to be at a sentiment extreme.
Gold has remained under pressure, with prices tracking the-long exposure lower. With prices residing around the 200eMA, there is potential for a technical bounce from current levels, but sentiment among large speculators appears to favour further losses further out.
Disclaimer: StoneX Financial Ltd (trading as "Forex.com") is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, Forex.com does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by Forex.com or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although Forex.com is not specifically prevented from dealing before providing this material, Forex.com does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
For further details see our full non-independent research disclaimer and quarterly summary.