CoT Sentiment Update for USD, Euro, Pound, Yen, Gold & Others

September 17, 2018

CoT Sentiment Update for USD, Euro, Pound, Yen, Gold & Others

COT HIGHLIGHTS:

Relatively uneventful week in CoT land
Pound traders have been most active past couple of weeks
Large spec profiles for other major currencies and markets

Friday’s report yet again didn’t show any major shifts in CoT positioning, which isn’t all that surprising given the choppy price action we’ve seen in currencies and commodities. The upside is that periods of benign price movement are followed by an uptick in volatility, so traders should be on their toes as sideways price action is bound to eventually lead to sustainable moves.

While bets on the US dollar have eased up a bit, large speculators remain largely bullish with long positioning still near its largest since the first half of last year. It will likely take a sizable decline to shake conviction. However, it is worth noting, that while bets on a higher US Dollar Index (DXY) are relatively large along with short bets against certain currencies, large specs are net-long the euro contract by a count of over 11k contracts. (Euro accounts for roughly 57% of the DXY.) However, this is considered a relative extreme given it has been trimmed from a record of nearly 150k contracts held earlier in the year.

Every Friday the CFTC releases a detailed report of traders’ positioning in the futures market as reported for the week ending on Tuesday. Outlined in the table below are key stats concerning the positioning of large speculators (i.e. hedge funds, CTAs, etc.). This group of traders largely employ trend-following strategies, and as such, their net long exposure typically increases in uptrends while net short positioning increases in downtrends. When analyzing the data, we take into consideration the direction of their position, magnitude of changes, as well as extremes.

Key stats: Net position, one-week change, and where the current position stands relative to the past 52 weeks.