Commitment of traders report (COT): Traders flipped to net-long euro

Research
Matt Simpson financial analyst
By :  ,  Market Analyst

Commitment of traders – as of Tuesday 20th of September:

  • Large speculators flipped to net-long exposure to euro future
  • Net-long exposure to dollar index futures fell at their fastest weekly pace since December 2020
  • Traders were their most bearish on NZD futures in 15-weeks
  • CAD traders were on the cusp of flipping to net-short exposure
20220926cotFOREXfx   This content will only appear on Forex websites! Read our guide on how to interpret the weekly COT report

EUR/USD futures positioning:

What stands out on this chart is that EUR/USD continues to nose-dive whilst market positioning is becoming less bearish. We had warned a few weeks back that net-short exposure was around a sentiment extreme, and it has since seen bearish exposure move to a 3-month low. Short covering has been the cause, with bearish closing around 81.5k short contracts with very little long interest. Yet as prices continue to tumble, it is clear that prices have not met a sentiment extreme – even if positioning hinted that it had. And we should also factor in that the CFTC report was compiled ahead of last week’s hawkish FOMC meeting, so some of those bears may have returned to the table. Buyer beware?

20220926cotEURfx

 

Commitment of traders – as of Tuesday 20th September 2022:

  • Large speculators reduced net-short exposure to gold futures for a sixth consecutive week
  • Net-short exposure to silver was on the cusp of flipping to net-long exposure
  • Traders flipped to net-long exposure to platinum futures

20220926cotCOMMfx

 

 

Gold futures positioning:

Large speculators continued to lose confidence on gold overall, with their net-long exposure falling for a sixth consecutive week and to its least bullish level since May 2019. Yet managed funds have a much clearer idea of where they think gold prices could be headed as net-short exposure for this group rose to its most bearish level since November 2018. Gross shorts increased for a sixth consecutive week, as did the reduction of gross longs. It is difficult to construct a bullish case for gold whilst the Fed remain hawkish, and perhaps we’ll need to wait for the feared recession to become reality – which could see the Fed cut rates – before gold’s safe-haven status is restored.

20220926cotGOLDfx

 

 

 

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