Weekly COT Report - Demand For USD Drops For A 2nd Week
Matt Simpson May 20, 2019 8:13 PM
A summary of the weekly Commitment of Traders Report (COT) from CFTC to show market positioning among large speculators.
As of Tuesday 14th May:
- Large speculators were net-long the US dollar by $29.7 billion ($34.3 against G10 currencies)
- Net long exposure to the USD fell by -$4.6 billion, the largest weekly decline in 3-month
- Net short exposure on Japanese yen futures declined by 30.1k contracts, the largest weekly move among FX majors.
- Net short exposure for Euro futures fell by 10.8k contracts
USD: Last week we noted that net-long positioning could be approaching a sentiment extreme. And now having seen two consecutive weeks of reduced long exposure, we’re closely watching to see if there is a follow-through.
JPY: Heightened trade tensions saw a further reduction of short exposure to the yen. 29.1k shorts were closed and 10k longs were added. With net-short exposure being reduced by 30.k contracts it was largest weekly change since June 2018.
As of Tuesday 14th May:
- Long exposure for WTI declined for a third consecutive week
- Gold bugs were their most bullish since February
- Copper traders are their most bearish since early February
- VIX traders reduced short exposure by 60.6k contracts (totalling 90.6k fewer shorts over the past two weeks)
WTI: Crude oil traders reduced their bullish exposure for a third consecutive week, their longest streak since mid-January. Volumes were also lower, with -8.8k long contracts being closed along with -2.3k short contracts. We don’t see anything too alarming in these numbers, which appear to be part of a natural correction after such a bullish run. It’s also worth noting that prices have rebounded above $60.
Gold: Net-long exposure has increased over the past three weeks, totalling an increase of 87.1k contracts. Moreover, each week has seen new longs initiated and short bets closed. We remain bullish on gold although its retracement has already met the bullish trendline beneath the support zone. So bullish action needs to resurface soon or the validity of the original breakout (and pick-up of increased long exposure) comes into question.
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.