Archive for Forex and Currency News – Page 23

12 Feb

Trade Of The Week: GBPUSD bears ready to strike?

By ForexTime 

  • Data heavy week for GBPUSD
  • UK data dump set to influence Pound
  • Dollar volatility also on the cards
  • Significant move on horizon
  • Key levels of interest at 50 SMA and 200 SMA

This could be an eventful week for the GBPUSD due to key economic reports from both the UK and the US.

Although prices have edged higher over the past few days, a massive range can be observed on the weekly charts.

There is a similar theme on the daily charts with resistance at the 50 SMA and support at the 200-day SMA.

After the aggressive US NFP-induced selloff witnessed earlier this month, the GBPUSD could resume its decline with the right fundamental forces.

Here are 3 factors to keep a close eye on:

  1. UK data dump 

The mid-month data dump featuring employment, inflation, and GDP among other key releases could offer fresh insight into the health of the UK economy.

  • Tuesday, February 13: UK January unemployment report

The unemployment rate is expected to rise to 4.0% in Q4 from Q3.

  • Wednesday, February 14: UK January CPI report 

The latest inflation report could rock Sterling, especially if it could offer more clues on the outlook for Bank of England (BoE) rates in 2024. Inflation is forecast to rise 4.1% year on year, up from 4% in December while the core is also forecast to hit 5.2%, up from 5.1%.

  • Thursday, February 15: UK industrial production & Q4 GDP 

Another major release will be the fourth quarter GDP report which is expected to show a second consecutive drop of 0.1% – confirming that the UK slipped into a technical recession at the end of 2023.

  • Friday, February 16: UK January retail sales

UK retail sales are forecast to fall -1.8% year-on-year in January compared to -2.4% in the previous month.

Potential GBP scenarios:

  • Sterling could appreciate if UK data including CPI exceed market forecasts – forcing investors to push back BoE cut bets.
  • Should overall data disappoint with UK inflation printing below forecasts, this may bolster BoE cut expectations – weakening the pound as a result.

  1. Key US data 

Dollar volatility could be a key theme due to a string of top-tier data and Fed speeches. It may be wise to keep a very close eye on the US CPI report and retail sales figures. 

  • Tuesday, February 13: US January CPI report 

US inflation is forecast to cool to 2.9% from 3.4% on an annual basis. The core which strips out food and energy prices is forecast to cool 3.7% from 3.9% in the prior month.

  • Thursday, February 15: US January Retail sales

US retail sales are forecast to slip -0.1% in January MoM compared to 0.6% in the prior month.

Potential USD scenarios:

  • Dollar bulls may receive a boost if strong economic data and hot inflation figures prompt investors to claw back bets for aggressive Fed cuts.
  • Dollar bears have the potential to jump back into the scene on weak US data and further signs of cooling price pressures.

  1. Technical forces 

The GBPUSD seems to be gearing up for a breakout on the daily charts with resistance at the 50-day SMA and support at the 200-day SMA. 

  • A solid breakdown below the 200-day SMA at 1.2560 could open a path towards 1.2485.
  • Should prices push beyond the 50-day SMA at 1.2670, bulls may target the next resistance around 1.2750.

Bloomberg’s FX model points to a 75% chance that GBPUSD will trade within the 1.2487 – 1.2752 range over the next one-week period.

Forex-Time-LogoArticle by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Forex and Currency News Opinions
08 Feb

RoboForex Introduces the Infinity Program: Revolutionising Partnership and Affiliate Marketing in Financial Trading

Belize City, Belize (7 February 2024) – RoboForex, a company that offers brokerage services in financial markets, announced the launch of its innovative Infinity Program, marking a significant evolution of its existing Partner Programs. Infinity provides partners with payouts of up to 85% of the average spread from clients’ closed positions and enables them to earn 20% from daily swaps on client open positions. This initiative aims to expand and incentivise RoboForex’s partner network, providing a well-structured opportunity to maximise profits and expand the business.

Infinity is designed as a comprehensive and highly competitive partner program, with a unique dual-layered approach to partner payouts. It combines a traditional approach with payouts of up to 85% of the average spread for the clients’ closed positions, and adds 20% commission from swaps daily for the opened positions.

According to average estimates, the Infinity Program is expected to increase commissions for partners up to 5.4 times compared to the previous VIP Partner Program. Starting from 5 February 2024, the Infinity Program is automatically available for all newly registered partners.

The Infinity Program also significantly shifts from the traditional percentage-based revenue share to a fixed commission amount model. This change aims to provide greater clarity and predictability in earnings, with examples illustrating diverse and lucrative opportunities available under the program. This fixed commission model represents a more transparent and direct approach to commissions, aligning with the program’s emphasis on clarity and partner benefits.

Another noteworthy feature of the Infinity Program is its innovative approach to swap commissions. Partners receive a generous 20% daily commission on swaps from opened positions of their referred clients, providing a steady and transparent everyday source of income.

Below is a summarised table representing some of the payout details:

InstrumentPayout from Spread, per lotPayout from Swap, per lot
GBPUSD9.3 USD (increased by 43%)up to 1.26 USD
XAUUSD8.8 USD (increased by 10%)up to 5.80 USD
EURUSD8.8 USD (increased by 35%)up to 1.92 USD
USDJPY8.3 USD (increased by 35%)up to 4.83 USD
USTechCash1.19 USD (increased by 83%)up to 0.70 USD
DE40Cash0.6 USD (increased by 445%)up to 0.68 USD

The Infinity Program also includes a robust sub-partner commission structure, maintaining a 10% of commission earned by sub-partners. For more information about the Infinity Program, please visit the corresponding webpage.

About RoboForex

RoboForex is a company that delivers brokerage services, providing traders in financial markets with access to its proprietary trading platforms. RoboForex Ltd operates under brokerage licence FSC 000138/7. View more detailed information about the Company’s products and activities on the official website roboforex.com.

 

 

Financial News Forex and Currency News
05 Feb

USD Strengthens Following Strong Employment Data

By RoboForex Analytical Department

The US dollar has seen a significant increase in strength against the Euro, with the EUR/USD pair falling to 1.0770 by Monday morning. This movement is largely attributed to the recent release of robust employment sector reports in the US for January, which have shifted investor expectations regarding the Federal Reserve’s interest rate decisions.

The Nonfarm Payrolls (NFP) report for January revealed an impressive increase of 353 thousand jobs, far exceeding the anticipated 187 thousand. Additionally, December’s NFP figures were revised upwards to 333 thousand. Average hourly earnings also saw a notable rise of 0.6% month-over-month, doubling the forecast. These indicators suggest mounting inflationary pressures, potentially complicating the Federal Reserve’s plans to normalize interest rates.

The latest employment data effectively solidified market projections, especially after Federal Reserve officials indicated that a rate cut in March was unlikely, with adjustments possibly being postponed until May.

EUR/USD Technical Analysis

The H4 chart analysis of EUR/USD indicates that a corrective wave reaching 1.0896 has concluded. The market is now in the midst of a downward trend aiming for 1.0722. Upon achieving this target, a potential corrective movement to 1.0808 might occur, serving as a test from below, before the trend resumes its descent towards 1.0682. This outlook is supported by the MACD indicator, which is positioned below zero and indicates a continued downward trajectory.

On the H1 chart, the EUR/USD pair has established a consolidation range around 1.0808. Following a downward breakout, the declining wave is expected to proceed towards 1.0722. After reaching this milestone, a correction back to 1.0808 could be anticipated. The Stochastic oscillator, with its signal line currently above 50, suggests a potential climb to 80 before a decline to 20, reinforcing the bearish scenario outlined.

Disclaimer

Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.

Financial News Forex and Currency News
05 Feb

Trade Of The Week: AUDUSD bears to keep upper hand?

By ForexTime 

  • AUD down against most G10 YTD
  • RBA decision + US data in focus
  • AUDUSD bearish on D1 chart
  • Strong USD could spell more pain
  • Key level of interest at 0.6550

The past few weeks have certainly been rough and rocky for the Australian dollar!

It has weakened against almost every single G10 currency so far in 2024, shedding over 4.5% versus the dollar.

After closing almost 1% lower last Friday following the blow-out NFP report (that saw 353k US jobs added in January), the AUDUSD has entered the new week on a shaky note. It is worth noting that the commodity currency was already pressured by growth concerns and signs of falling inflation in Australia.

With the dollar set to appreciate as investors claw back bets for aggressive Fed rate cuts, this could mean more pain for Aussie.

Here are 3 reasons why the AUDUSD is on our radar:

  1. RBA decision

The Reserve Bank of Australia is expected to leave interest rates unchanged at its February 6th policy meeting, keeping the cash rate at 4.35%.

Signs of rapidly cooling inflationary pressures in the final quarter of 2023 have reinforced bets around the central bank’s next move being a rate cut. This development coupled with the shaky economic outlook could lend RBA doves further support.

Traders are currently pricing in a 67% probability of a rate cut by the RBA in June with a cut fully priced in by August 2024.

  • The Aussie is likely to weaken if the RBA strikes a dovish tone and signals that it’s next move will be a cut this year.
  • Should the RBA sound more hawkish and express intentions to keep rates higher for longer, this could push the Aussie higher.

  1. Dollar volatility

Dollar volatility could be a key theme this week as investors not only digest last Friday’s strong US jobs data but prepare for more key data and speeches by Fed officials.

The biggest event risk may be the US CPI revisions published on Friday. As highlighted in our week ahead report, this could heavily influence expectations around Fed rate cuts if there are any major revisions.

As of writing, traders are pricing in a 77% probability of a Fed rate cut by May with a cut fully priced in by June 2024.

These odds could look different by the end of the week depending on incoming data and Fed speeches.

  • Should overall data and Fed speeches boost the dollar, this may drag the AUDUSD lower.
  • If the dollar ends up weakening, the AUDUSD could experience a technical bounce.

  1. Technical forces

Aussie bears are back in power after securing a daily close below the 0.6550 support. Prices are trading below the 50, 100 and 200-day SMA while the MACD trades below zero. The trend is bearish but the Relative Strength Index (RSI) is signaling that prices are approaching oversold levels.

  • Sustained weakness below the 100-day SMA may encourage a decline towards 0.6430 and 0.6410, respectively.
  • Should prices push back above 0.6550, this could open a path towards the 200-day SMA at 0.6570.

 

Forex-Time-LogoArticle by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Financial News Forex and Currency News
04 Feb

Japanese Yen Speculators add to their bearish bets as yen falls

By InvestMacro

Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC).

The latest COT data is updated through Tuesday January 30th and shows a quick view of how large market participants (for-profit speculators and commercial traders) were positioned in the futures markets. All currency positions are in direct relation to the US dollar where, for example, a bet for the euro is a bet that the euro will rise versus the dollar while a bet against the euro will be a bet that the euro will decline versus the dollar.

Weekly Speculator Changes led by New Zealand Dollar & Canadian Dollar

The COT currency market speculator bets were higher this week as six out of the eleven currency markets we cover had higher positioning while the other five markets had lower speculator contracts.

Leading the gains for the currency markets was the Canadian Dollar (6,063 contracts) with the Mexican Peso (5,294 contracts), British Pound (2,716 contracts), the Swiss Franc (1,267 contracts), the New Zealand Dollar (703 contracts) and the EuroFX (447 contracts) also showing positive weeks.

The currencies seeing declines in speculator bets on the week were the Japanese Yen (-9,810 contracts) the Brazilian Real (-5,452 contracts), the Australian Dollar (-4,175 contracts), the US Dollar Index (-1,275 contracts) and Bitcoin (-137 contracts) also recording lower bets on the week.

Japanese Yen Speculators add to their bearish bets as yen falls

Highlighting the COT currency’s data this week is recent the drop in sentiment for the Japanese yen speculators. Large speculative yen positions dropped for a third straight week this week and for the fourth time out of the past five weeks. The decline over the last three weeks is a total of -24,506 contracts that has taken the speculative level from -55,949 net contracts on January 9th to this week’s total at -80,455 net contracts. The current level is now at the most bearish standing since December 12th.

The yen had seen a respite from the negative speculative bets in December and January (going from -104,956 contracts on December 5th to -55,949 on January 9th) as market watchers had been expecting the Bank of Japan (BOJ) will eventually look to end its negative interest rate policy. However, the BOJ has largely maintained their interest rate policy and thrown cold water onto the yen bulls (possibly) premature hopes.

The yen exchange rate (versus the US Dollar) has been on the back-foot now for four out of the past five weeks after having made gains through November and December. The US Dollar had fallen versus the yen and brought the USDJPY currency pair to the 140.25 mark in late December which was the best level for the yen since July. Since starting the new year, the yen has been declining and this week the USDJPY closed at approximately the 148.30 level – an almost 6 percent gain for the USD versus the yen since January 1st.

Major Currencies – Speculators Leaderboard

Legend: Weekly Speculators Change | Speculators Current Net Position | Speculators Strength Score compared to last 3-Years (0-100 range)

Strength Scores led by Mexican Peso & British Pound

COT Strength Scores (a normalized measure of Speculator positions over a 3-Year range, from 0 to 100 where above 80 is Extreme-Bullish and below 20 is Extreme-Bearish) showed that the Mexican Peso (88 percent) and the British Pound (79 percent) lead the currency markets this week. The EuroFX (58 percent), the Brazilian Real (58 percent) and the Canadian Dollar (57 percent) come in as the next highest in the weekly strength scores.

On the downside, the US Dollar Index (25 percent) and the Japanese Yen (30 percent) come in at the lowest strength levels currently. The next lowest strength scores are the Australian Dollar (35 percent) and the Bitcoin (39 percent).

Strength Statistics:
US Dollar Index (24.7 percent) vs US Dollar Index previous week (26.9 percent)
EuroFX (58.1 percent) vs EuroFX previous week (57.9 percent)
British Pound Sterling (79.5 percent) vs British Pound Sterling previous week (77.6 percent)
Japanese Yen (29.7 percent) vs Japanese Yen previous week (35.6 percent)
Swiss Franc (47.8 percent) vs Swiss Franc previous week (44.2 percent)
Canadian Dollar (57.1 percent) vs Canadian Dollar previous week (52.0 percent)
Australian Dollar (35.4 percent) vs Australian Dollar previous week (39.2 percent)
New Zealand Dollar (52.7 percent) vs New Zealand Dollar previous week (50.9 percent)
Mexican Peso (88.2 percent) vs Mexican Peso previous week (85.0 percent)
Brazilian Real (58.2 percent) vs Brazilian Real previous week (65.3 percent)
Bitcoin (39.3 percent) vs Bitcoin previous week (41.4 percent)

 

Canadian Dollar & British Pound top the 6-Week Strength Trends

COT Strength Score Trends (or move index, calculates the 6-week changes in strength scores) showed that the Canadian Dollar (44 percent) and the British Pound (10 percent) lead the past six weeks trends for the currencies. Bitcoin (8 percent), the Swiss Franc (6 percent) and the New Zealand Dollar (6 percent) are the next highest positive movers in the latest trends data.

The Brazilian Real (-33 percent) leads the downside trend scores currently with the EuroFX (-11 percent), Japanese Yen (-9 percent) and the Australian Dollar (-7 percent) following next with lower trend scores.

Strength Trend Statistics:
US Dollar Index (-6.0 percent) vs US Dollar Index previous week (-26.9 percent)
EuroFX (-11.0 percent) vs EuroFX previous week (-25.1 percent)
British Pound Sterling (9.9 percent) vs British Pound Sterling previous week (6.8 percent)
Japanese Yen (-9.3 percent) vs Japanese Yen previous week (6.3 percent)
Swiss Franc (6.2 percent) vs Swiss Franc previous week (26.5 percent)
Canadian Dollar (43.6 percent) vs Canadian Dollar previous week (39.3 percent)
Australian Dollar (-7.0 percent) vs Australian Dollar previous week (-1.6 percent)
New Zealand Dollar (6.1 percent) vs New Zealand Dollar previous week (30.6 percent)
Mexican Peso (-2.2 percent) vs Mexican Peso previous week (0.6 percent)
Brazilian Real (-33.1 percent) vs Brazilian Real previous week (-29.7 percent)
Bitcoin (8.3 percent) vs Bitcoin previous week (6.1 percent)

Individual COT Forex Markets:

US Dollar Index Futures:

US Dollar Index Forex Futures COT ChartThe US Dollar Index large speculator standing this week came in at a net position of 372 contracts in the data reported through Tuesday. This was a weekly decline of -1,275 contracts from the previous week which had a total of 1,647 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 24.7 percent. The commercials are Bullish with a score of 77.2 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 15.4 percent.

Price Trend-Following Model: Downtrend

Our weekly trend-following model classifies the current market price position as: Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

US DOLLAR INDEX StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:67.015.411.2
– Percent of Open Interest Shorts:65.518.39.8
– Net Position:372-739367
– Gross Longs:17,2383,9642,878
– Gross Shorts:16,8664,7032,511
– Long to Short Ratio:1.0 to 10.8 to 11.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):24.777.215.4
– Strength Index Reading (3 Year Range):BearishBullishBearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-6.04.013.5

 

Euro Currency Futures:

Euro Currency Futures COT ChartThe Euro Currency large speculator standing this week came in at a net position of 88,771 contracts in the data reported through Tuesday. This was a weekly boost of 447 contracts from the previous week which had a total of 88,324 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 58.1 percent. The commercials are Bearish with a score of 45.8 percent and the small traders (not shown in chart) are Bearish with a score of 22.4 percent.

Price Trend-Following Model: Uptrend

Our weekly trend-following model classifies the current market price position as: Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

EURO Currency StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:27.659.410.8
– Percent of Open Interest Shorts:15.375.47.1
– Net Position:88,771-116,00627,235
– Gross Longs:200,360432,31178,589
– Gross Shorts:111,589548,31751,354
– Long to Short Ratio:1.8 to 10.8 to 11.5 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):58.145.822.4
– Strength Index Reading (3 Year Range):BullishBearishBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-11.011.1-6.1

 

British Pound Sterling Futures:

British Pound Sterling Futures COT ChartThe British Pound Sterling large speculator standing this week came in at a net position of 34,153 contracts in the data reported through Tuesday. This was a weekly lift of 2,716 contracts from the previous week which had a total of 31,437 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 79.5 percent. The commercials are Bearish with a score of 24.8 percent and the small traders (not shown in chart) are Bullish with a score of 64.4 percent.

Price Trend-Following Model: Uptrend

Our weekly trend-following model classifies the current market price position as: Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

BRITISH POUND StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:40.337.715.4
– Percent of Open Interest Shorts:22.557.213.7
– Net Position:34,153-37,3803,227
– Gross Longs:77,49972,53229,604
– Gross Shorts:43,346109,91226,377
– Long to Short Ratio:1.8 to 10.7 to 11.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):79.524.864.4
– Strength Index Reading (3 Year Range):BullishBearishBullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:9.9-5.6-8.4

 

Japanese Yen Futures:

Japanese Yen Forex Futures COT ChartThe Japanese Yen large speculator standing this week came in at a net position of -80,455 contracts in the data reported through Tuesday. This was a weekly decline of -9,810 contracts from the previous week which had a total of -70,645 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 29.7 percent. The commercials are Bullish with a score of 68.8 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 83.6 percent.

Price Trend-Following Model: Weak Uptrend

Our weekly trend-following model classifies the current market price position as: Weak Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

JAPANESE YEN StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:18.661.617.3
– Percent of Open Interest Shorts:51.828.417.2
– Net Position:-80,45580,134321
– Gross Longs:44,918148,97241,873
– Gross Shorts:125,37368,83841,552
– Long to Short Ratio:0.4 to 12.2 to 11.0 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):29.768.883.6
– Strength Index Reading (3 Year Range):BearishBullishBullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-9.310.3-5.9

 

Swiss Franc Futures:

Swiss Franc Forex Futures COT ChartThe Swiss Franc large speculator standing this week came in at a net position of -3,904 contracts in the data reported through Tuesday. This was a weekly rise of 1,267 contracts from the previous week which had a total of -5,171 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 47.8 percent. The commercials are Bearish with a score of 45.7 percent and the small traders (not shown in chart) are Bullish with a score of 60.2 percent.

Price Trend-Following Model: Uptrend

Our weekly trend-following model classifies the current market price position as: Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

SWISS FRANC StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:21.252.825.9
– Percent of Open Interest Shorts:29.437.732.8
– Net Position:-3,9047,222-3,318
– Gross Longs:10,13725,24512,368
– Gross Shorts:14,04118,02315,686
– Long to Short Ratio:0.7 to 11.4 to 10.8 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):47.845.760.2
– Strength Index Reading (3 Year Range):BearishBearishBullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:6.2-3.9-1.5

 

Canadian Dollar Futures:

Canadian Dollar Forex Futures COT ChartThe Canadian Dollar large speculator standing this week came in at a net position of -2,388 contracts in the data reported through Tuesday. This was a weekly lift of 6,063 contracts from the previous week which had a total of -8,451 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 57.1 percent. The commercials are Bearish with a score of 48.9 percent and the small traders (not shown in chart) are Bearish with a score of 37.4 percent.

Price Trend-Following Model: Uptrend

Our weekly trend-following model classifies the current market price position as: Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

CANADIAN DOLLAR StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:24.554.420.1
– Percent of Open Interest Shorts:26.057.116.0
– Net Position:-2,388-4,2006,588
– Gross Longs:39,10186,76332,032
– Gross Shorts:41,48990,96325,444
– Long to Short Ratio:0.9 to 11.0 to 11.3 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):57.148.937.4
– Strength Index Reading (3 Year Range):BullishBearishBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:43.6-34.26.3

 

Australian Dollar Futures:

Australian Dollar Forex Futures COT ChartThe Australian Dollar large speculator standing this week came in at a net position of -58,295 contracts in the data reported through Tuesday. This was a weekly decrease of -4,175 contracts from the previous week which had a total of -54,120 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 35.4 percent. The commercials are Bullish with a score of 61.4 percent and the small traders (not shown in chart) are Bullish with a score of 51.1 percent.

Price Trend-Following Model: Weak Uptrend

Our weekly trend-following model classifies the current market price position as: Weak Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

AUSTRALIAN DOLLAR StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:22.359.113.2
– Percent of Open Interest Shorts:57.523.613.6
– Net Position:-58,29558,847-552
– Gross Longs:36,95697,88821,902
– Gross Shorts:95,25139,04122,454
– Long to Short Ratio:0.4 to 12.5 to 11.0 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):35.461.451.1
– Strength Index Reading (3 Year Range):BearishBullishBullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-7.09.5-12.0

 

New Zealand Dollar Futures:

New Zealand Dollar Forex Futures COT ChartThe New Zealand Dollar large speculator standing this week came in at a net position of -1,040 contracts in the data reported through Tuesday. This was a weekly gain of 703 contracts from the previous week which had a total of -1,743 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 52.7 percent. The commercials are Bearish with a score of 44.0 percent and the small traders (not shown in chart) are Bullish with a score of 66.4 percent.

Price Trend-Following Model: Uptrend

Our weekly trend-following model classifies the current market price position as: Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

NEW ZEALAND DOLLAR StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:38.245.112.4
– Percent of Open Interest Shorts:41.045.98.8
– Net Position:-1,040-2891,329
– Gross Longs:14,11416,6824,588
– Gross Shorts:15,15416,9713,259
– Long to Short Ratio:0.9 to 11.0 to 11.4 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):52.744.066.4
– Strength Index Reading (3 Year Range):BullishBearishBullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:6.1-3.9-7.7

 

Mexican Peso Futures:

Mexican Peso Futures COT ChartThe Mexican Peso large speculator standing this week came in at a net position of 80,393 contracts in the data reported through Tuesday. This was a weekly gain of 5,294 contracts from the previous week which had a total of 75,099 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 88.2 percent. The commercials are Bearish-Extreme with a score of 10.3 percent and the small traders (not shown in chart) are Bearish with a score of 45.1 percent.

Price Trend-Following Model: Uptrend

Our weekly trend-following model classifies the current market price position as: Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

MEXICAN PESO StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:53.141.63.1
– Percent of Open Interest Shorts:21.075.81.0
– Net Position:80,393-85,7175,324
– Gross Longs:132,808103,9317,803
– Gross Shorts:52,415189,6482,479
– Long to Short Ratio:2.5 to 10.5 to 13.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):88.210.345.1
– Strength Index Reading (3 Year Range):Bullish-ExtremeBearish-ExtremeBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-2.20.616.9

 

Brazilian Real Futures:

Brazil Real Futures COT ChartThe Brazilian Real large speculator standing this week came in at a net position of 18,298 contracts in the data reported through Tuesday. This was a weekly decline of -5,452 contracts from the previous week which had a total of 23,750 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 58.2 percent. The commercials are Bearish with a score of 40.5 percent and the small traders (not shown in chart) are Bullish with a score of 54.2 percent.

Price Trend-Following Model: Weak Uptrend

Our weekly trend-following model classifies the current market price position as: Weak Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

BRAZIL REAL StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:48.138.14.4
– Percent of Open Interest Shorts:24.564.41.6
– Net Position:18,298-20,4242,126
– Gross Longs:37,24829,4543,388
– Gross Shorts:18,95049,8781,262
– Long to Short Ratio:2.0 to 10.6 to 12.7 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):58.240.554.2
– Strength Index Reading (3 Year Range):BullishBearishBullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-33.134.2-15.1

 

Bitcoin Futures:

Bitcoin Crypto Futures COT ChartThe Bitcoin large speculator standing this week came in at a net position of -1,798 contracts in the data reported through Tuesday. This was a weekly decline of -137 contracts from the previous week which had a total of -1,661 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 39.3 percent. The commercials are Bullish-Extreme with a score of 90.6 percent and the small traders (not shown in chart) are Bearish with a score of 30.7 percent.

Price Trend-Following Model: Uptrend

Our weekly trend-following model classifies the current market price position as: Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

BITCOIN StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:79.96.16.9
– Percent of Open Interest Shorts:88.61.13.2
– Net Position:-1,7981,017781
– Gross Longs:16,5191,2531,435
– Gross Shorts:18,317236654
– Long to Short Ratio:0.9 to 15.3 to 12.2 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):39.390.630.7
– Strength Index Reading (3 Year Range):BearishBullish-ExtremeBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:8.3-7.3-6.0

 

Article By InvestMacro – Receive our weekly COT Newsletter

*COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets.

The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting). See CFTC criteria here.

COT Updates Forex and Currency News Opinions
02 Feb

Speculator Extremes: DowJones, Nasdaq, Soybeans & Corn lead Bullish & Bearish Positions

By InvestMacro 

The latest update for the weekly Commitment of Traders (COT) report was released by the Commodity Futures Trading Commission (CFTC) on Friday for data ending on January 30th.

This weekly Extreme Positions report highlights the Most Bullish and Most Bearish Positions for the speculator category. Extreme positioning in these markets can foreshadow strong moves in the underlying market.

To signify an extreme position, we use the Strength Index (also known as the COT Index) of each instrument, a common method of measuring COT data. The Strength Index is simply a comparison of current trader positions against the range of positions over the previous 3 years. We use over 80 percent as extremely bullish and under 20 percent as extremely bearish. (Compare Strength Index scores across all markets in the data table or cot leaders table)

Here Are This Week’s Most Bullish Speculator Positions:

DowJones Mini

The DowJones Mini speculator position comes in as the most bullish extreme standing this week. The DowJones Mini speculator level is currently at a 100.0 percent score of its 3-year range.

The six-week trend for the percent strength score totaled 28.1 this week. The overall net speculator position was a total of 24,410 net contracts this week with a rise of 6,162 contract in the weekly speculator bets.

Speculators or Non-Commercials Notes:

Speculators, classified as non-commercial traders by the CFTC, are made up of large commodity funds, hedge funds and other significant for-profit participants. The Specs are generally regarded as trend-followers in their behavior towards price action – net speculator bets and prices tend to go in the same directions. These traders often look to buy when prices are rising and sell when prices are falling. To illustrate this point, many times speculator contracts can be found at their most extremes (bullish or bearish) when prices are also close to their highest or lowest levels.

These extreme levels can be dangerous for the large speculators as the trade is most crowded, there is less trading ammunition still sitting on the sidelines to push the trend further and prices have moved a significant distance. When the trend becomes exhausted, some speculators take profits while others look to also exit positions when prices fail to continue in the same direction. This process usually plays out over many months to years and can ultimately create a reverse effect where prices start to fall and speculators start a process of selling when prices are falling.

Nasdaq


The Nasdaq speculator position comes next in the extreme standings this week. The Nasdaq speculator level is now at a 100.0 percent score of its 3-year range.

The six-week trend for the percent strength score was 26.5 this week. The speculator position registered 39,251 net contracts this week with a weekly increase of 6,209 contracts in speculator bets.

3-Month Secured Overnight Financing Rate


The 3-Month Secured Overnight Financing Rate speculator position comes in third this week in the extreme standings. The 3-Month Secured Overnight Financing Rate speculator level resides at a 96.7 percent score of its 3-year range.

The six-week trend for the speculator strength score came in at 6.6 this week. The overall speculator position was 705,145 net contracts this week with a decline of -64,042 contracts in the weekly speculator bets.

Gasoline


The Gasoline speculator position comes up number four in the extreme standings this week. The Gasoline speculator level is at a 94.0 percent score of its 3-year range.

The six-week trend for the speculator strength score totaled a change of 1.0 this week. The overall speculator position was 73,270 net contracts this week with a dip of -471 contracts in the speculator bets.

Mexican Peso


The Mexican Peso speculator position rounds out the top five in this week’s bullish extreme standings. The Mexican Peso speculator level sits at a 88.2 percent score of its 3-year range. The six-week trend for the speculator strength score was -2.2 this week.

The speculator position was 80,393 net contracts this week with an increase of 5,294 contracts in the weekly speculator bets.

This Week’s Most Bearish Speculator Positions:

Soybean Oil


The Soybean Oil speculator position comes in as the most bearish extreme standing this week. The Soybean Oil speculator level is at a 0.0 percent score of its 3-year range.

The six-week trend for the speculator strength score was -13.0 this week. The overall speculator position was -38,035 net contracts this week with a drop of -12,677 contracts in the speculator bets.

Corn


The Corn speculator position comes in next for the most bearish extreme standing on the week. The Corn speculator level is at a 0.0 percent score of its 3-year range.

The six-week trend for the speculator strength score was -12.7 this week. The speculator position was -224,832 net contracts this week with a decline of -5,632 contracts in the weekly speculator bets.

Soybeans


The Soybeans speculator position comes in as third most bearish extreme standing of the week. The Soybeans speculator level resides at a 0.0 percent score of its 3-year range.

The six-week trend for the speculator strength score was -36.4 this week. The overall speculator position was -140,577 net contracts this week with a reduction of -34,583 contracts in the speculator bets.

Soybean Meal


The Soybean Meal speculator position comes in as this week’s fourth most bearish extreme standing. The Soybean Meal speculator level is at a 0.0 percent score of its 3-year range.

The six-week trend for the speculator strength score was -45.2 this week. The speculator position was -33,932 net contracts this week with a shortfall of -13,316 contracts in the weekly speculator bets.

10-Year Note


Finally, the 10-Year Note speculator position comes in as the fifth most bearish extreme standing for this week. The 10-Year Note speculator level is at a 2.8 percent score of its 3-year range.

The six-week trend for the speculator strength score was -16.0 this week. The speculator position was -859,015 net contracts this week with a decline of -74,337 contracts in the weekly speculator bets.

Article By InvestMacro – Receive our weekly COT Newsletter

*COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets.

The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting). See CFTC criteria here.

COT Updates Forex and Currency News Opinions
02 Feb

African countries are struggling with high debt, demands to spend more and collapsing currencies: the policy fixes that could help

By Jonathan Munemo, Salisbury University 

Highly indebted African countries are facing stark trade-offs between servicing expensive debt, supporting high and growing development needs, and stabilising domestic currencies.

Government debt has risen in at least 40 African countries over the past decade. As a result, some are experiencing a bad combination of high debt, elevated development spending needs amid budget shortfalls, and unfavourable exchange rate pressures.

These issues have become more pressing since 2022, when persistently high inflation prompted major central banks around the world to embark on the most aggressive monetary tightening campaign in decades. Monetary policy tightens when central banks raise interest rates.

Since then, global interest rates have climbed even higher, triggering a jump in repayments on external loans and adding to debt burdens accumulated over the last decade. In addition, some countries with worsening debt situations have endured large exchange rate depreciations and struggled to stabilise the value of their domestic currencies.

My perspective, shaped by years of researching Africa’s development challenges, is that this presents many countries with a triple set of dilemmas that’s not easy to navigate. Tackling any of one of these issues imperils the others.

Here are some examples:

  • stemming the rise in public debt and containing exchange rate decreases would make it more difficult to meet bigger public spending needs
  • pushing for lower public debt while supporting extra spending risks putting more strain on domestic currencies
  • prioritising higher spending needs and easing currency strains runs the risk of inviting extra government debt.

Steps can be taken to expand the policy space to tackle these challenges while easing difficult trade-offs. These steps include prioritising public spending measures that raise growth, fixing the revenue collection problem facing all African countries, and restructuring unsustainable government debt.

Rising government debt and policy dilemmas

The triple dilemma unfolded as government debts rose substantially over the last decade. As shown in Figure 1, median government debt has more than doubled since 2012 and amounted to 61% of GDP as of 2023.

At first, historically low global interest rates in the decade after the global financial crisis in 2008 contributed powerfully to burgeoning debt by making it easy to borrow large amounts of cheap money.

The debt trends of countries have worsened sharply since then. Factors have included the COVID-19 pandemic, which triggered a cost-of-living crisis, and Russia’s invasion of Ukraine, which contributed to a rapid rise in global interest rates.

In Africa, the pain from higher borrowing costs is particularly acute for governments, given that public debt represented nearly 60% of the region’s total external debt in 2022 (Figure 1). Nineteen countries, including Ghana and Zambia, are already in debt distress (meaning they are unable to meet financial obligations) or at high risk of debt distress.

Ghana’s public debt has more than doubled since 2012 and amounts to 85% of GDP. Zambia’s went up much higher and stood at 98% as of 2022.

Both Ghana and Zambia, along with Ethiopia, have defaulted on their foreign debt, sparking fears about a broader sovereign debt crisis on the continent if more countries fall into debt distress.

Others face high risk of debt distress. Kenya is on the edge of financial distress after its debt increased steadily to 70% of GDP. South Africa also faces elevated public debt, which has almost doubled over the last decade and currently stands at 74% of GDP.

And yet trimming high debts won’t be easy. Development needs are high after coffers were drained by higher spending tied to the pandemic and fallout from Ukraine.

The International Monetary Fund estimates that the median sub-Saharan African country needs to increase spending by at least 20% of GDP to meet sustainable development goals on health, education and infrastructure by 2030. Climate change adaptation is expected to add billions of dollars each year for the continent.

Coffers are also being depleted by more money being spent repaying expensive loans. This has the additional effect of depleting foreign exchange reserves, which means countries overburdened by debt also have to contend with weakening currencies.

Kenya’s debt interest payment as a share of revenue rose from 11% in 2014 to more than 20% after 2020. This depleted its reserves as a share of external debt from 47% to less than 20% over the same period. This has pressured the Kenyan shilling, which lost more than 19% against the US dollar last year.

In the cases of Ghana and Zambia, debt interest payments climbed even higher. For Ghana they were around 45% of revenue. For Zambia, around 39%. By 2022 reserves had dwindled to 22% in Ghana and to 10% in Zambia.

This precipitated large depreciations of Ghana’s cedi and Zambia’s kwacha.

South Africa’s debt interest payments increased at a relatively slower pace to about 15% of revenue after 2021 and it kept a higher reserve share of about 35%. This was why the decline in the rand was not as steep as in the other three countries.

Weakening currencies also make foreign debt servicing costlier. Consequently, reasonable debt can quickly turn into unmanageable debt.

Lower government revenue collection has also intensified debt risks.

In 2023, revenue collected was 16% of GDP in Ghana, 17% in Kenya and 21% in Zambia. This is significantly below the 27% median level seen in other developing economies. Although this median level is matched by South Africa, rising costs of social transfers including welfare grants and subsidies to state-owned enterprises such as the power utility Eskom and transport utility Transnet have added upward pressure on public debt amid slowing growth.

What can be done

A number of steps can be taken to alleviate the trade-offs countries are having to make.

Firstly, governments should prioritise public spending measures that raise growth.

These include critical spending on education, health, infrastructure and other high-quality growth enhancing investments. As economic growth picks up, it is likely to generate more government revenue to pay down the debt.

It also means allocating more spending on first generation reforms. These are structural reforms that alleviate major growth constraints. For example, long-standing reforms in governance remain critical in African countries which generally lag behind countries in other regions on various measures of governance quality such as rule of law, control of corruption and government accountability.

Secondly, countries need to fix their revenue collection problems. While growth leads to a larger economy that generates additional revenue, low levels of domestic revenue collection constrain the ability of governments to pay down debt and fund vital social and growth sectors.

Across Africa, several countries, including South Africa, Nigeria, Ghana, Zambia, Kenya and Ethiopia, have mobilised efforts to spur gains in revenue collection. These include new levies, higher taxes, registering more shops on the tax roll, broadening tax bases, strengthening tax administration and other revenue enhancing measures.

Lastly, governments need to restructure their debt portfolios. When a debt crisis cannot be avoided, restructuring debt can reduce the amount owed to creditors by revising the amount and timing of future principal and interest payments. Chad reached an agreement to restructure its external debt under the G20 Common Framework for Debt Treatment in 2022. This is an initiative designed to support low income developing countries with unsustainable debt. Since then, Ghana and Zambia have also launched debt restructuring negotiations under the G20 Common Framework.

Other highly indebted countries struggling to service their liabilities may have to do the same amid rising concerns about slow progress of the Common Framework.The Conversation

About the Author:

Jonathan Munemo, Professor of Economics, Salisbury University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Forex and Currency News Opinions
29 Jan

USD in Limbo as Market Anticipates Fed’s Decision

By RoboForex Analytical Department

The EUR/USD currency pair is experiencing minimal fluctuations as it consolidates around 1.0840 this Monday. The focus of market players is squarely on the upcoming meeting of the US Federal Reserve System, which is poised to be the week’s pivotal event. The outcome of this meeting is highly anticipated, as the Fed will disclose whether it plans to lower interest rates in March or opt for a more cautious approach, delaying any changes until May.

This meeting is significant as the Federal Reserve is expected to be the first major central bank in this cycle of stringent policies to initiate a softening of monetary conditions. This prospect has injected a sense of heightened anticipation into the currency markets.

Later in the week, additional attention will be on the release of US labor market statistics for January. Key indicators to watch include the Nonfarm Payrolls (NFP), forecasted to show a rise of 173 thousand – a slowdown from the previous 216 thousand. Additionally, average hourly earnings are projected to exhibit a 0.3% month-over-month increase, slightly down from the prior 0.4% increase.

EUR/USD Technical Analysis

On the H4 chart of EUR/USD, a downward trend towards 1.0793 is emerging. Following this target, a corrective move to 1.0833, testing from below, is possible before a further decline to 1.0737. The MACD indicator supports this outlook, with its signal line below zero and pointing downwards.

In the H1 chart analysis, the pair has completed a correction to 1.0884 and has started a new downward movement towards 1.0839. A consolidation range is expected to form around this level. If the pair breaks below this range, the decline could continue to 1.0803. The Stochastic oscillator, currently at the 50 mark, indicates a potential drop to 20, aligning with this downward trend scenario.

Disclaimer

Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.

Financial News Forex and Currency News
29 Jan

Trade Of The Week: GBPUSD on cusp of major breakout?

By ForexTime 

  • High-risk events could move GBPUSD
  • Fed/BoE combo + NFP in focus
  • GBPUSD bound within symmetrical triangle
  • Key levels of interest at 1.2800 & 1.2600
  • Who will win tug of war?

After swinging within a 200-pip range since mid-December, the GBPUSD could be on the verge of a big move.

This may be triggered by a selection of high-risk events featuring central bank decisions and key economic data. In addition, the symmetrical triangle pattern on the daily charts has the potential to intensify the direction of any breakout/down opportunity.

In the G10 space, Sterling has held its ground against the dollar year-to-date thanks to the BoE’s relatively hawkish tone amid stubborn inflation.

Nevertheless, the GBP and USD remain trapped in a fierce tug of war with a fresh catalyst needed to shift the scales of power in one direction.

Here are 3 factors that could trigger a breakout in the GBPUSD:

  1. BoE rate decision

On Thursday 1st February, the Bank of England (BoE) will meet for the first time this year to decide on interest rates. This will be accompanied by the minutes of the meeting, the quarterly Monetary Policy Report (MPR), and MPC press conference.

Markets widely expect the BoE to leave interest rates unchanged at 5.25% for a fourth straight meeting. Although there has been evidence of disinflation, hawks remain in the building with the central bank not expected to kick off its easing cycle until Summer.

Traders are currently pricing in a 60% probability of a 25-basis point cut by May 2024, with a cut by June 2024 fully priced in. 

  • If the BoE sounds hawkish and pushes back on rate-cut bets, this could boost GBPUSD.
  • A dovish-sounding BoE that hints at potential cuts down the road could weaken GBPUSD.

  1. Fed rate decision + NFP

Over the United States, the Federal Reserve meeting and US jobs data could rock the dollar.

The Fed is expected to leave interest rates unchanged this week but the odd of a March rate cut has now moved to roughly 50% according to Fed Fund futures. Regarding the NFP report, the US economy is expected to have created 180,000 jobs in December compared to 216,000 in the previous month. Ultimately, this combo of heavy-hitting events could translate to increased volatility for the USD – influencing the GBPUSD as a result. 

  • Should the Fed meeting and jobs data support the dollar, this may pull the GBPUSD lower. 
  • A dovish-sounding Fed and soft data is dollar bearish, providing support for GBPUSD.

  1. Technical forces

The GBPUSD has entered standby mode with prices bound within a symmetrical triangle pattern.

Bulls and bears remain entangled in a fierce battle despite prices trading above the 50, 100, and 200-day SMA. Major resistance can be found at 1.2800 and support at 1.2600. 

  • A decisive breakout above 1.2760 may open the doors towards 1.2800 and levels not seen since July 2023 at 1.2850. 
  • Should prices drop below the 50-day SMA at 1.2666, bears may be inspired to attack 1.2600 and the 200-day SMA at 1.2557. 

Forex-Time-LogoArticle by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Forex and Currency News Opinions
21 Jan

Currency Speculators drop their US Dollar Index bets to 133-week low

By InvestMacro

Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC).

The latest COT data is updated through Tuesday January 16th and shows a quick view of how large market participants (for-profit speculators and commercial traders) were positioned in the futures markets. All currency positions are in direct relation to the US dollar where, for example, a bet for the euro is a bet that the euro will rise versus the dollar while a bet against the euro will be a bet that the euro will decline versus the dollar.

Weekly Speculator Changes led by British Pound Sterling & Swiss Franc

The COT currency market speculator bets were lower this week as three out of the eleven currency markets we cover had higher positioning while the other eight markets had lower speculator contracts.

Leading the gains for the currency markets was the British Pound (10,197 contracts) with the Swiss Franc (654 contracts) and Bitcoin (624 contracts) also recording positive weeks.

The currencies seeing declines in speculator bets on the week were the Australian Dollar (-15,583 contracts), the Euro (-14,785 contracts), the Mexican Peso (-6,837 contracts), the Canadian Dollar (-6,008 contracts), the US Dollar Index (-1,610 contracts), the New Zealand Dollar (-1,115 contracts), the Japanese Yen (-611 contracts) and with the Brazilian Real (-419 contracts) also seeing lower bets on the week.

Speculators drop their US Dollar Index bets to 133-week low

Highlighting the COT currency’s data this week is the continued decline of the speculator’s positioning in the US Dollar Index. The large speculative US Dollar Index positions fell this week for a fifth time out of the past six weeks. The speculator position has now seen an overall decrease by a total of -18,644 net contracts over this last six-week span.

This recent weakness has brought the US Dollar Index speculator net position (currently at a total of +1,300 contracts) to a 133-week low, dating back to June 29th of 2021 when the net position saw it’s last bearish reading at -448 contracts.

The Dollar Index is starting off 2024 on much weaker footing than the previous two years as expectations of peak interest rates in the US have weighed on the currency’s outlook. The Dollar Index’s speculator positioning started 2023 with a total of +17,761 contracts in the first week of trading and the average weekly speculator position over the whole of 2023 was +12,782 contracts. The first week of 2022 started even stronger with a net position of +39,078 contracts in the first week and the weekly average speculator position over the course of 2022 was +33,606 contracts.

The US Dollar Index price, despite the recent setback in speculator bets, has risen for two out of the past three weeks with an approximate gain by 1 percent this week. Since October, the USD Index has been on a downtrend and declined from an October high of 107.05 to the most recent low at 100.32 in late December. The USD Index price has come off that 100.00 support level and has now climbed back to the 103.07 level to close out this week.

Major Currencies – Speculators Leaderboard


Legend: Weekly Speculators Change | Speculators Current Net Position | Speculators Strength Score compared to last 3-Years (0-100 range)

Strength Scores led by Mexican Peso & British Pound

COT Strength Scores (a normalized measure of Speculator positions over a 3-Year range, from 0 to 100 where above 80 is Extreme-Bullish and below 20 is Extreme-Bearish) showed that the Mexican Peso (89 percent) and the British Pound (77 percent) lead the currency markets this week. The Brazilian Real (67 percent), EuroFX (65 percent) and Bitcoin (51 percent) come in as the next highest in the weekly strength scores.

On the downside, the US Dollar Index (27 percent) and the Japanese Yen (42 percent) come in at the lowest strength levels currently.

Strength Statistics:
US Dollar Index (27.0 percent) vs US Dollar Index previous week (29.6 percent)
EuroFX (64.6 percent) vs EuroFX previous week (70.9 percent)
British Pound Sterling (77.2 percent) vs British Pound Sterling previous week (70.2 percent)
Japanese Yen (42.1 percent) vs Japanese Yen previous week (42.4 percent)
Swiss Franc (47.9 percent) vs Swiss Franc previous week (46.1 percent)
Canadian Dollar (47.8 percent) vs Canadian Dollar previous week (52.9 percent)
Australian Dollar (44.9 percent) vs Australian Dollar previous week (59.2 percent)
New Zealand Dollar (47.9 percent) vs New Zealand Dollar previous week (50.8 percent)
Mexican Peso (88.9 percent) vs Mexican Peso previous week (93.1 percent)
Brazilian Real (66.5 percent) vs Brazilian Real previous week (67.1 percent)
Bitcoin (51.4 percent) vs Bitcoin previous week (42.1 percent)

 

Swiss Franc & Canadian Dollar top the 6-Week Strength Trends

COT Strength Score Trends (or move index, calculates the 6-week changes in strength scores) showed that the Swiss Franc (40 percent) and the Canadian Dollar (37 percent) lead the past six weeks trends for the currencies. The New Zealand Dollar (35 percent), the Japanese Yen (28 percent) and Bitcoin (19 percent) are the next highest positive movers in the latest trends data.

The Brazilian Real (-33 percent) leads the downside trend scores currently with the US Dollar Index (-31 percent) and the EuroFX (-21 percent) following next with lower trend scores.

Strength Trend Statistics:
US Dollar Index (-31.2 percent) vs US Dollar Index previous week (-27.0 percent)
EuroFX (-20.6 percent) vs EuroFX previous week (-10.3 percent)
British Pound Sterling (13.4 percent) vs British Pound Sterling previous week (19.9 percent)
Japanese Yen (27.6 percent) vs Japanese Yen previous week (30.4 percent)
Swiss Franc (40.0 percent) vs Swiss Franc previous week (45.0 percent)
Canadian Dollar (37.3 percent) vs Canadian Dollar previous week (46.9 percent)
Australian Dollar (9.0 percent) vs Australian Dollar previous week (35.7 percent)
New Zealand Dollar (35.3 percent) vs New Zealand Dollar previous week (46.5 percent)
Mexican Peso (5.0 percent) vs Mexican Peso previous week (14.0 percent)
Brazilian Real (-33.1 percent) vs Brazilian Real previous week (-10.1 percent)
Bitcoin (18.9 percent) vs Bitcoin previous week (1.9 percent)

Individual COT Forex Markets:

US Dollar Index Futures:

US Dollar Index Forex Futures COT ChartThe US Dollar Index large speculator standing this week came in at a net position of 1,300 contracts in the data reported through Tuesday. This was a weekly lowering of -1,610 contracts from the previous week which had a total of 2,910 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 27.0 percent. The commercials are Bullish with a score of 76.3 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 11.1 percent.

Price Trend-Following Model: Strong Downtrend

Our weekly trend-following model classifies the current market price position as: Strong Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

US DOLLAR INDEX StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:64.216.711.8
– Percent of Open Interest Shorts:58.622.211.9
– Net Position:1,300-1,292-8
– Gross Longs:15,0773,9182,781
– Gross Shorts:13,7775,2102,789
– Long to Short Ratio:1.1 to 10.8 to 11.0 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):27.076.311.1
– Strength Index Reading (3 Year Range):BearishBullishBearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-31.230.04.4

 

Euro Currency Futures:

Euro Currency Futures COT ChartThe Euro Currency large speculator standing this week came in at a net position of 104,092 contracts in the data reported through Tuesday. This was a weekly lowering of -14,785 contracts from the previous week which had a total of 118,877 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 64.6 percent. The commercials are Bearish with a score of 38.1 percent and the small traders (not shown in chart) are Bearish with a score of 30.7 percent.

Price Trend-Following Model: Uptrend

Our weekly trend-following model classifies the current market price position as: Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

EURO Currency StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:27.959.111.1
– Percent of Open Interest Shorts:13.777.86.6
– Net Position:104,092-136,51332,421
– Gross Longs:204,294433,57781,115
– Gross Shorts:100,202570,09048,694
– Long to Short Ratio:2.0 to 10.8 to 11.7 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):64.638.130.7
– Strength Index Reading (3 Year Range):BullishBearishBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-20.619.6-6.6

 

British Pound Sterling Futures:

British Pound Sterling Futures COT ChartThe British Pound Sterling large speculator standing this week came in at a net position of 30,931 contracts in the data reported through Tuesday. This was a weekly rise of 10,197 contracts from the previous week which had a total of 20,734 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 77.2 percent. The commercials are Bearish with a score of 28.3 percent and the small traders (not shown in chart) are Bullish with a score of 58.1 percent.

Price Trend-Following Model: Uptrend

Our weekly trend-following model classifies the current market price position as: Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

BRITISH POUND StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:36.841.416.5
– Percent of Open Interest Shorts:19.658.616.4
– Net Position:30,931-30,98049
– Gross Longs:66,23074,43829,608
– Gross Shorts:35,299105,41829,559
– Long to Short Ratio:1.9 to 10.7 to 11.0 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):77.228.358.1
– Strength Index Reading (3 Year Range):BullishBearishBullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:13.4-10.6-0.5

 

Japanese Yen Futures:

Japanese Yen Forex Futures COT ChartThe Japanese Yen large speculator standing this week came in at a net position of -56,560 contracts in the data reported through Tuesday. This was a weekly lowering of -611 contracts from the previous week which had a total of -55,949 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 42.1 percent. The commercials are Bullish with a score of 63.3 percent and the small traders (not shown in chart) are Bearish with a score of 49.3 percent.

Price Trend-Following Model: Weak Uptrend

Our weekly trend-following model classifies the current market price position as: Weak Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

JAPANESE YEN StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:20.758.618.0
– Percent of Open Interest Shorts:47.229.720.4
– Net Position:-56,56061,724-5,164
– Gross Longs:44,180125,04838,443
– Gross Shorts:100,74063,32443,607
– Long to Short Ratio:0.4 to 12.0 to 10.9 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):42.163.349.3
– Strength Index Reading (3 Year Range):BearishBullishBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:27.6-22.8-9.1

 

Swiss Franc Futures:

Swiss Franc Forex Futures COT ChartThe Swiss Franc large speculator standing this week came in at a net position of -3,738 contracts in the data reported through Tuesday. This was a weekly lift of 654 contracts from the previous week which had a total of -4,392 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 47.9 percent. The commercials are Bearish with a score of 38.6 percent and the small traders (not shown in chart) are Bullish with a score of 74.6 percent.

Price Trend-Following Model: Uptrend

Our weekly trend-following model classifies the current market price position as: Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

SWISS FRANC StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:21.144.533.9
– Percent of Open Interest Shorts:28.543.927.0
– Net Position:-3,7382733,465
– Gross Longs:10,62722,45017,114
– Gross Shorts:14,36522,17713,649
– Long to Short Ratio:0.7 to 11.0 to 11.3 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):47.938.674.6
– Strength Index Reading (3 Year Range):BearishBearishBullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:40.0-43.534.0

 

Canadian Dollar Futures:

Canadian Dollar Forex Futures COT ChartThe Canadian Dollar large speculator standing this week came in at a net position of -13,388 contracts in the data reported through Tuesday. This was a weekly lowering of -6,008 contracts from the previous week which had a total of -7,380 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 47.8 percent. The commercials are Bullish with a score of 54.6 percent and the small traders (not shown in chart) are Bearish with a score of 41.6 percent.

Price Trend-Following Model: Uptrend

Our weekly trend-following model classifies the current market price position as: Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

CANADIAN DOLLAR StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:23.355.319.8
– Percent of Open Interest Shorts:31.452.314.7
– Net Position:-13,3884,9288,460
– Gross Longs:38,73891,78332,870
– Gross Shorts:52,12686,85524,410
– Long to Short Ratio:0.7 to 11.1 to 11.3 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):47.854.641.6
– Strength Index Reading (3 Year Range):BearishBullishBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:37.3-36.430.9

 

Australian Dollar Futures:

Australian Dollar Forex Futures COT ChartThe Australian Dollar large speculator standing this week came in at a net position of -47,857 contracts in the data reported through Tuesday. This was a weekly decline of -15,583 contracts from the previous week which had a total of -32,274 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 44.9 percent. The commercials are Bearish with a score of 46.5 percent and the small traders (not shown in chart) are Bullish with a score of 73.9 percent.

Price Trend-Following Model: Uptrend

Our weekly trend-following model classifies the current market price position as: Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

AUSTRALIAN DOLLAR StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:28.051.316.5
– Percent of Open Interest Shorts:57.327.511.1
– Net Position:-47,85739,0448,813
– Gross Longs:45,81283,91126,937
– Gross Shorts:93,66944,86718,124
– Long to Short Ratio:0.5 to 11.9 to 11.5 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):44.946.573.9
– Strength Index Reading (3 Year Range):BearishBearishBullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:9.0-12.014.7

 

New Zealand Dollar Futures:

New Zealand Dollar Forex Futures COT ChartThe New Zealand Dollar large speculator standing this week came in at a net position of -2,882 contracts in the data reported through Tuesday. This was a weekly fall of -1,115 contracts from the previous week which had a total of -1,767 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 47.9 percent. The commercials are Bearish with a score of 44.7 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 85.1 percent.

Price Trend-Following Model: Uptrend

Our weekly trend-following model classifies the current market price position as: Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

NEW ZEALAND DOLLAR StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:37.942.115.8
– Percent of Open Interest Shorts:45.442.18.3
– Net Position:-2,882-12,883
– Gross Longs:14,59216,2036,094
– Gross Shorts:17,47416,2043,211
– Long to Short Ratio:0.8 to 11.0 to 11.9 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):47.944.785.1
– Strength Index Reading (3 Year Range):BearishBearishBullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:35.3-34.719.8

 

Mexican Peso Futures:

Mexican Peso Futures COT ChartThe Mexican Peso large speculator standing this week came in at a net position of 81,602 contracts in the data reported through Tuesday. This was a weekly decrease of -6,837 contracts from the previous week which had a total of 88,439 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 88.9 percent. The commercials are Bearish-Extreme with a score of 10.0 percent and the small traders (not shown in chart) are Bearish with a score of 41.0 percent.

Price Trend-Following Model: Uptrend

Our weekly trend-following model classifies the current market price position as: Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

MEXICAN PESO StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:50.743.72.9
– Percent of Open Interest Shorts:19.876.41.1
– Net Position:81,602-86,2714,669
– Gross Longs:133,691115,0507,623
– Gross Shorts:52,089201,3212,954
– Long to Short Ratio:2.6 to 10.6 to 12.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):88.910.041.0
– Strength Index Reading (3 Year Range):Bullish-ExtremeBearish-ExtremeBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:5.0-4.5-3.3

 

Brazilian Real Futures:

Brazil Real Futures COT ChartThe Brazilian Real large speculator standing this week came in at a net position of 24,695 contracts in the data reported through Tuesday. This was a weekly lowering of -419 contracts from the previous week which had a total of 25,114 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 66.5 percent. The commercials are Bearish with a score of 32.2 percent and the small traders (not shown in chart) are Bullish with a score of 55.7 percent.

Price Trend-Following Model: Uptrend

Our weekly trend-following model classifies the current market price position as: Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

BRAZIL REAL StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:67.124.96.3
– Percent of Open Interest Shorts:25.170.82.5
– Net Position:24,695-26,9772,282
– Gross Longs:39,44114,6223,731
– Gross Shorts:14,74641,5991,449
– Long to Short Ratio:2.7 to 10.4 to 12.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):66.532.255.7
– Strength Index Reading (3 Year Range):BullishBearishBullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-33.131.64.1

 

Bitcoin Futures:

Bitcoin Crypto Futures COT ChartThe Bitcoin large speculator standing this week came in at a net position of -994 contracts in the data reported through Tuesday. This was a weekly advance of 624 contracts from the previous week which had a total of -1,618 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 51.4 percent. The commercials are Bullish with a score of 64.1 percent and the small traders (not shown in chart) are Bearish with a score of 36.1 percent.

Price Trend-Following Model: Uptrend

Our weekly trend-following model classifies the current market price position as: Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

BITCOIN StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:75.55.87.5
– Percent of Open Interest Shorts:79.86.03.1
– Net Position:-994-251,019
– Gross Longs:17,5771,3611,747
– Gross Shorts:18,5711,386728
– Long to Short Ratio:0.9 to 11.0 to 12.4 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):51.464.136.1
– Strength Index Reading (3 Year Range):BullishBullishBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:18.9-35.93.5

 

Article By InvestMacro – Receive our weekly COT Newsletter

*COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets.

The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting). See CFTC criteria here.

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