InvestMacro

Japanese yen weakens despite government warnings

By RoboForex Analytical Department

The USD/JPY pair is on the rise again this Wednesday, recovering more than half of its previous losses despite ongoing warnings from Japanese authorities about sharp fluctuations in the yen. Finance Minister Shunichi Suzuki reiterated today that the government is prepared to act against excessive currency volatility. Additionally, Bank of Japan Governor Kazuo Ueda noted that the BoJ is assessing the impact of yen movements on inflation to inform future decisions better.

Last week, the yen strengthened by 5.2%, a move that the market largely attributes to financial interventions. While there has been no official confirmation of these measures, the market’s interpretation is bolstered by data from the Bank of Japan, which indicates approximately 60 billion USD in expenditures. These actions are likely aimed at stabilising the national currency’s value

However, these interventions only provided a brief respite for the authorities. The yen’s decline remains primarily influenced by the significant interest rate differential between the US Federal Reserve and the Bank of Japan. With rates at 5.5% and 0%, respectively, this disparity continues to exert downward pressure on the yen, and as long as it persists, the currency is likely to remain weak.

USD/JPY technical analysis

On the H4 chart, USD/JPY is currently forming a wave of decline towards 151.40. The local target of 151.86 has already been reached. The market is now correcting from the previous wave of decline and is expected to reach at least 156.00. After this correction, a new phase of decline towards 151.40 may begin. This scenario is technically supported by the MACD oscillator, whose signal line is below zero but directed upwards.

On the H1 chart, USD/JPY has formed a consolidation range around the 154.00 level, with an anticipated upward breakout leading to a correction towards 156.00. Currently, a growth link to 155.88 is forming. Following this, a potential decline back to 154.00 (testing from above) may occur before possibly rising again to 156.00. The Stochastic oscillator confirms this technical outlook, with its signal line above 80 and poised for a decline.

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

07 May

Is Boeing (BA) a Recovery Play? Evaluating Upside Potential and Risks

By Ino.com

The Boeing Company (BA), a stalwart in aircraft manufacturing and services, has faced a cascade of challenges so far this year. Just as the dust was settling on its mid-air blowout incident in January, another report emerged of a plane having mechanical failures, though this one is somewhat different from the reports we’ve already heard.

This time, it’s a Delta flight from New York to Los Angeles, reporting a problem with the emergency slide on the right wing and a strange sound. While this isn’t good news for Boeing, given that the plane is quite old (flying since 1990), it’s not expected to cause too much trouble either.

Now, let’s evaluate the upside potential and risks associated with investing in BA, considering factors like financials, growth prospects, valuation, and industry dynamics.

A Tumultuous Start to 2024

Boeing and its aircraft manufacturer have faced significant media attention since the start of 2024, with a series of incidents prompting investigations. In January, an Alaska Airlines Boeing 737 MAX 9 had to make an emergency landing in Portland, Oregon, because a part of the plane’s fuselage blew out.

Although there were no casualties, the U.S. National Transportation Safety Board (NTSB) investigation revealed that the door was not properly secured due to missing bolts. As a result, it led to a grounding of its 737-9 MAX fleet, increased scrutiny of the plane maker’s 737 production and safety processes, and decreased overall plane production.

Later in January, an ANA (All Nippon Airways) Boeing 737-800 had to return to Japan after a crack was found on its cockpit window during flight.

On February 21, a United Airlines Boeing 757-200 made an emergency landing in Denver due to wing damage. Furthermore, in March, a United Airlines Boeing 777-200 had to land in Los Angeles after a tire fell off following take-off, damaging vehicles below.

Other incidents include a brief rudder control failure on a Boeing 737 Max in New Jersey, a United Airlines Boeing 737 MAX 8 going off the taxiway in Houston, and a Boeing 737 in Medford, Oregon, being found missing a panel.

Further, on March 18, an Alaska Airlines Boeing 737 had a cracked windshield upon landing in Portland.

Can Boeing Be Trusted Again?

Such incidents have dealt a significant blow to the company, raising concerns about BA’s approach of prioritizing profits over safety. Particularly, the Alaska Airlines incident led to tighter regulatory scrutiny, financial implications, and demands for compensation, potentially hampering Boeing’s growth trajectory.

However, the company has taken steps to improve quality, including expanding inspections, changing how work is performed, increasing training, and soliciting more feedback from employees.

“We are absolutely committed to doing everything we can to make certain our regulators, customers, employees and the flying public are 100 percent confident in Boeing,” Dave Calhoun, Boeing’s chief executive officer, said in a letter to employees last week.

Moreover, the company is also in talks to acquire Spirit AeroSystems Holdings, Inc. (SPR), a troubled supplier that builds the body of the Max jet, which had been a part of Boeing until it was spun out two decades ago. This potential acquisition reflects Boeing’s commitment to streamlining its supply chain, strengthening production capabilities, and exerting greater control over supplier policies and practices.

Disappointing Financial Performance

Despite a rocky start this year, Boeing reported a slightly better-than-feared quarter but continued to burn cash (almost $4 billion) as it tried to stabilize production. With fewer planes exiting factories in the last three months, Boeing’s revenue suffered a significant blow in the first quarter.

For the quarter that ended March 31, 2023, the company posted a 7.5% year-over-year decline in its total revenues to $16.57 billion. Its non-GAAP core operating loss came in at $388 million and $1.13 per share, respectively. Also, BA’s net loss for the quarter amounted to $355 million, which was not as steep as analysts had expected, and it was smaller than the $425 million loss in the prior year’s period.

Deliveries of Boeing’s commercial planes declined by 36% year-on-year in the first three months of 2024. The airline company also reported an operating cash outflow of $3.36 billion, compared with $318 million cash outflow in the last year’s period. Also, it posted a negative free cash flow of $3.92 billion, compared with a loss of $787 million a year ago. Further, the total company backlog grew to $529 billion, including over 5,600 commercial airplanes.

CEO Dave Calhoun, emphasizing the ‘tough moment,’ said, “Lower deliveries can be difficult for our customers and for our financials. But safety and quality must and will come above all else.”

Mixed Analyst Expectations

As Boeing continues to face substantial expenses in resolving identified issues, compensating affected parties, and handling potential legal matters, CFO Brian West believes the company will have a “sizable use of cash” in the second quarter.

Analysts expect BA’s revenue for the fiscal year (ending December 2024) to increase 4.2% year-over-year to $81.09 billion. However, the company is expected to report a loss per share of $0.55. For the ongoing quarter ending June 2024, its revenue is estimated to decline 3.6% year-over-year to $19.05 billion.

However, Street expects the company’s revenue for the next quarter (ending September 30, 2024) to increase by 18.5% year-over-year to $21.46 billion, while its earnings per share is expected to be at $0.41.

During this challenging period, Calhoun stated, “We are utilizing this period, challenging as it may be, to intentionally reduce the pace of operations, strengthen the supply chain, enhance our factory operations, and position Boeing to consistently deliver the reliability and quality our customers expect in the long run.”

Bottom Line

BA’s ongoing challenges, including numerous safety issues, production halts, and delayed deliveries, have put the firm in a complex situation where forecasting future demand has become increasingly precarious. These headwinds are significantly impacting its airline customer base, leading to declining profitability, cash flow problems, and inventory issues that might linger for a while.

Despite these short-term hurdles, the company is committed to strengthening its market position, achieving long-term growth outlooks, and improving predictability for both customers and investors. But this process is going to take some time and concerted effort.

Ultimately, the market’s confidence in Boeing depends on its ability to bounce back from its current challenges. However, the question remains: can the recovery be achieved soon?

Regarding price performance, the stock has plunged nearly 15% over the past three months and more than 33% year-to-date.

Moreover, the stock seems pretty pricey at the moment. In terms of forward P/E, BA is currently trading at 142.59x, which is substantially higher than the industry average of 23.99x. The stock’s forward EV/Sales of 1.81x is 2.9% higher than the industry average of 1.76x. Also, its forward EV/EBITDA of 33.92x compares to the industry average of 11.30x.

Besides, BA’s trailing-12-month gross profit and levered FCF margins of 11.48% and 4.01% are 62.7% and 38.9% lower than the industry averages of 30.80% and 6.56%, respectively. Also, its net income margin of negative 2.81% compares to the industry average of 5.86%.

Recently, Argus Research downgraded their outlook for BA stock from Buy to Hold, estimating a target price of $243.01, indicating a 40.1% upside. In addition, Northcoast Research downgraded the stock from Neutral to Sell.

Given these factors, we believe waiting for a better entry point in this stock could be wise now.

By Ino.com – See our Trader Blog, INO TV Free & Market Analysis Alerts

Source: Is Boeing (BA) a Recovery Play? Evaluating Upside Potential and Risks

Opinions Stock Market News

07 May

Brent crude oil experiences modest uptick amid mixed market signals

By RoboForex Analytical Department

Brent crude oil is seeing a slight increase on Tuesday, priced around $83.57 per barrel. The market remains close to two-month lows, caught between optimism for a peaceful resolution to the Middle East conflict and concerns over crude oil inventories in the United States.

The primary focus in the stock market currently revolves around the ongoing negotiations between Israel and Hamas, facilitated by Egypt. However, these talks have hit an impasse, and there are renewed signs of conflict from both parties. Israel has expressed dissatisfaction, stating that the terms offered do not meet its demands, thereby complicating diplomatic efforts.

Despite these challenges, the ongoing conflict in the Middle East contributes to supporting energy prices due to fears of potential disruptions in raw material supplies. On the demand side, Saudi Arabia has recently increased its oil selling prices to Asian buyers, indicating an expectation of robust demand, particularly during the upcoming summer. This adjustment is often seen when a producer is confident about expanding demand, with Saudi Arabia likely counting on strong consumption from China, the world’s leading oil importer.

Brent technical analysis

On the H4 chart, Brent has achieved the local target of the growth wave at 91.50. The correction towards 82.70 is nearing completion, and we anticipate the formation of a consolidation range above this level. Should the price break upwards from this range, a new wave of growth towards $95.00 could be initiated. This bullish scenario is technically supported by the MACD indicator, which shows the signal line at the lows under the zero mark, indicating potential growth to new highs.

On the H1 chart, the structure of the fifth wave of correction to 82.70 has been formed. A consolidation range has developed above this level, and we expect a growth link to 84.44. Should this level be surpassed, it could open the potential for a growth wave to 85.70, which is the initial target. This technical outlook is corroborated by the Stochastic oscillator, with its signal line above 20 and prepared to ascend to 80.

Disclaimer

Energy Financial News

07 May

FXTM’s Wheat: Touches fresh 2024 high!

By ForexTime

Wheat kisses new 2024 high

Prices ↑ over 8% month-to-date

Watch out for WASDE report on Friday

Bulls back in control on D1 charts

Key levels at 638, 629 and 615

FXTM’s new Wheat commodity is in the spotlight after hitting a fresh 2024 high on Tuesday!

Prices hit the 638 level this morning as fundamentals powered bulls.

Note: Wheat is priced per bushel. One bushel is equivalent to 60 pounds.

The soft commodity could see more action this week ahead of the highly anticipated WASDE report.

Note: WASDE is the abbreviation for The World Agricultural Supply and Demand Estimates.

This report is published by the United States Department of Agriculture (USDA).

But before we take a deep dive into the world of Wheat, here are the basics:

What is Wheat?

Wheat is a widely cultivated grain that is consumed across the world.

It is the main ingredient for many foods, ranging from bread, biscuits, cereals, and cakes among many other foods.

What does FXTM’s Wheat track

FXTM’s Wheat tracks the Chicago Soft Red Winter (SRW) futures.

This is the most actively traded wheat contract in the US and the global standard wheat benchmark in the world.

Some fun facts:

One of the oldest crops in the world

6 classes of wheat grown across the US

China is the largest wheat producer

Russia is the biggest wheat exporter

Gained over 8% month-to-date

The lowdown…

Wheat prices have been appreciating in recent weeks.

The soft commodity has gained over 13% since the start of April due to worries about dry weather in key exporting countries.

A lack of rain in Russia, the world’s largest wheat supplier has fuelled concerns over global production.

The bigger picture

The world’s Wheat stockpiles have contracted over the past four years.

Russia’s war in Ukraine along with other geopolitical developments and negative weather conditions in key exporting regions have hit global wheat stocks.

This has fuelled concerns over a tightening between the supply and demand of wheat.

Why this is an important week

All eyes will be on the USDA’s World Agriculture Supply and Demand Estimate report due on Friday.

This may offer investors fresh insight into the production and stocks of key grain for 2024.

Should the report show a decline in wheat production, this could push prices higher.

Technical outlook…

Bulls have made their presence known on the daily charts, with prices flirting around the 2024 high.

Still, prices may experience a technical throwback before the uptrend resumes.

Looking at the H1 charts, prices are under pressure with 629 acting as a resistance level.

Sustained weakness below this point may open a path towards 615, 50 SMA, and 595.

Should prices push back above 629, this could trigger a move back towards 638 and the next psychological level at 650.

Article by ForexTime

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

Financial News Soft Commodities

07 May

The RBA kept all monetary policy settings. Oil rises amid the breakdown of negotiations between Israel and Hamas

By JustMarkets

At Monday’s close, the Dow Jones (US30) Index added 0.46%, while the S&P 500 (US500) Index was up 1.46%. The NASDAQ Technology Index (US100) closed positive 1.19% yesterday.

The Dollar Index stabilized above 105 on Tuesday as investors continued to assess the Federal Reserve’s monetary policy outlook in light of the central bank’s recent comments. New York Fed Chairman John Williams said decisions on interest rate cuts will be made based on incoming data. At the same time, Federal Reserve Bank of Richmond Chairman Thomas Barkin expressed confidence that inflation will fall to 2% as the full effect of a rate hike materializes. Markets estimate the odds of a 25 bps rate cut at 10% at the June 12 FOMC meeting and 34% at the July 31 meeting.

Equity markets in Europe were mostly up. Germany’s DAX (DE40) rose by 0.96%, France’s CAC 40 (FR40) closed 0.49% higher, Spain’s IBEX 35 (ES35) added 0.58%, and the UK’s FTSE 100 (UK100) was not trading yesterday.

ECB Chief Economist Lane said the latest Eurozone data gives him confidence that inflation is returning to the ECB’s 2% target, raising the likelihood of a first interest rate cut in June. ECB Governing Council spokesman Simkus said he expects the ECB to cut interest rates three times this year, starting with a planned move in June. These are strengthening factors for European indices.

WTI crude oil prices rose to $79 a barrel on Tuesday, extending gains from the previous session, as ceasefire talks between Israel and Hamas appeared to have stalled. Hamas agreed to the mediators’ ceasefire proposal on Monday, but Israel said the terms did not meet its demands. The ongoing conflict in the Middle East has supported oil prices amid concerns it could disrupt crude supplies from the region. On the demand side, Saudi Arabia raised official selling prices for its crude oil sold to Asia, Northwest Europe, and the Mediterranean in June amid forecasts of strong oil demand this summer.

Asian markets were mostly rising on Monday. Japan’s Nikkei 225 (JP225) was not trading yesterday, China’s FTSE China A50 (CHA50) added 1.50% for the day, Hong Kong’s Hang Seng (HK50) was up 0.55% for the day and Australia’s ASX 200 (AU200) was positive 0.70%.

Hong Kong stocks fell to 18,480 in morning deals on Thursday, falling for the first time in 11 sessions due to losses in most sectors, particularly technology, consumer discretionary, and financials. Traders profited after the Hang Seng Index hit its highest level in 8 months. Vigilance was also heightened ahead of several key data releases from China this week, including April trade and inflation data.

As expected, the Reserve Bank of Australia (RBA) left the money rate unchanged at 4.35% at its May meeting. The central bank kept borrowing costs unchanged for the fourth consecutive meeting, acknowledging that the return of inflation to target is unlikely to be smooth. The Council added that it needs to make sure prices move towards the 2-3% range while remaining vigilant on upside risks and reiterated that it would neither rule in nor rule out anything as it would rely on data and risk assessment. In doing so, the RBA will keep an eye on the global economy, domestic demand trends, and the inflation and labor market outlook. The ASX 200 (AU200) hit a one-month high on the back of the decision.

S&P 500 (US500) 5,180.74 +52.95 (+1.03%)

Dow Jones (US30) 38,852.27 +176.59 (+0.46%)

DAX (DE40) 18,175.21 +173.61 (+0.96%)

FTSE 100 (UK100) 8,213.49 +41.34 (+0.51%)

USD Index 105.11 +0.08 (+0.07%)

Important events today:

– Japan Services PMI (m/m) at 03:30 (GMT+3);
– Australia RBA Interest Rate Decision at 07:30 (GMT+3);
– Australia RBA Monetary Policy Report at 07:30 (GMT+3);
– German Trade Balance (m/m) at 09:00 (GMT+3);
– UK Services PMI (m/m) at 11:30 (GMT+3);
– Canada Ivey PMI (m/m) at 17:00 (GMT+3).

By JustMarkets

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

Economics & Fundamentals Financial News

06 May

Investors expect a hawkish stance from the RBA. Natural gas prices returned to growth

By JustMarkets

On Friday, the Dow Jones (US30) was up 1.18% (for the week +1.03%), while the S&P 500 (US500) was up 1.26% (for the week +0.27%). The NASDAQ Technology Index (US100) closed positive 1.99% (for the week +0.93%). The US stocks rose thanks to a weaker-than-expected April employment report, which increased expectations of a Federal Reserve interest rate cut in September.

The US jobs report recorded a 175,000 increase in Non-farm payroll employment for April, compared to the consensus forecast of 240,000, while March data was revised slightly upward to 315,000 from 303,000. In the household survey, the unemployment rate rose to 3.9% from 3.8%, with a slight increase in employment. Average hourly earnings rose 0/2% for the month, slightly below expectations of 0.3%, with year-over-year growth slowing to 3.9% from 4.1%. The data suggests the labor market is cooling, and wage pressures are slowing. According to economists, given the current situation, the US Fed will likely start cutting rates in September.

Canada’s services PMI for April 2024 came in at 49.3, up from March’s 46.4. This is the highest reading since June but is still indicative of contraction. The slower decline in activity is partly due to a stabilization in new orders. The latest data showed no change in new work, ending eight months of contraction.

Equity markets in Europe were mostly up on Friday. The German DAX (DE40) rose by 0.59% (for the week +0.45%), the French CAC 40 (FR40) closed Friday up 0.54% (for the week -1.42%), the Spanish IBEX 35 (ES35) declined 0.16% (for the week -1.72%), the British FTSE 100 (UK100) closed positive 0.51% (for the week +0.90%).

The S&P Global UK Services PMI for April 2024 jumped to 55 from 53.1 the previous month, indicating a sixth consecutive period of growth at the sharpest pace in over a year. Service providers saw a sharp increase in new orders amid changing economic conditions for clients. Combined with a decline in work backlogs, business activity also increased significantly. Based on signs of recovering customer demand, upcoming marketing initiatives, and long-term expansion plans, companies remained optimistic about the outlook for business activity in the coming year.

The Eurozone unemployment rate for March 2024 was a record low of 6.5%, in line with market expectations and the previous three months. The unemployed fell by 94 thousand from the previous month to 11.087 million. Among the major Eurozone countries, Spain recorded the highest unemployment rate at 11.7%, followed by France at 7.3% and Italy at 7.2%. In contrast, Germany recorded the lowest rate of 3.2%. A year earlier, the unemployment rate was slightly higher at 6.6%.

Norges Bank (NB) kept its key interest rate unchanged at 4.5% in May 2024 for the third consecutive time, in line with market expectations, and said the rate will remain at the current level “for some time.” Norway’s central bank said monetary policy is tight enough to have a tightening effect on the economy, keeping growth low and enough to bring inflation back to target within a “reasonable time horizon.” However, policymakers noted they would be willing to hold another rate hike if monetary conditions were insufficient to bring inflation back to the bank’s target level.

The US natural gas (XNG) prices rose more than 5% to above $2.1 per mmbbl on Friday, nearing a three-month high thanks to rising exports and production cuts. Major energy giants like EQT and Chesapeake Energy have cut drilling and production, leading to a 9% decline in US gas output this year. Gas production fell to 98.1 Bcf/d in April from a record 105.5 Bcf/d in December 2023 and continued to decline in May.

Asian markets were mostly up last week. Japan’s Nikkei 225 (JP225) rose by 0.45%, China’s FTSE China A50 (CHA50) decreased by 0.25% for the week, Hong Kong’s Hang Seng (HK50) jumped by 6.57% for the week, and Australia’s ASX 200 (AU200) was positive 0.55%.

The Australian dollar holds above $0.66, which is near its strongest level in two months, as investors await the Reserve Bank of Australia’s (RBA) policy decision this week. The central bank is expected to leave interest rates unchanged, but markets are betting it will take a more hawkish stance due to recent strong domestic inflation figures. Australia’s inflation rate fell to 3.6% in the first quarter from 4.1% in the previous quarter, slowing for the fifth consecutive quarter but beating forecasts of 3.4%.

S&P 500 (US500) 5,127.79 +63.59 (+1.26%)

Dow Jones (US30) 38,675.68 +450.02 (+1.18%)

DAX (DE40) 18,001.60 +105.10 (+0.59%)

FTSE 100 (UK100) 8,213.49 +41.34 (+0.51%)

USD Index 105.08 -0.22 (-0.21%)

Important events today:

– China Caixin Services PMI (m/m) at 04:45 (GMT+3);
– Germany Services PMI (m/m) at 10:55 (GMT+3);
– Eurozone Services PMI (m/m) at 11:00 (GMT+3);
– Eurozone Producer Price Index (m/m) at 12:00 (GMT+3);
– SNB Board Member Jordan Speaks at 15:25 (GMT+3);
– US FOMC Member Barkin Speaks at 20:00 (GMT+3);
– US FOMC Member Williams Speaks at 20:00 (GMT+3).

By JustMarkets

Economics & Fundamentals Financial News

06 May

Trade Of The Week: Ripple ready to create waves?

By ForexTime

Ripple waits on SEC response

Crypto ↓ 12% year-to-date

Rangebound on D1 timeframe

Key levels of interest 0.5675, 0.5350 & 0.4750

Breakout on the horizon?

Our focus falls on Ripple due to the legal drama with the US Securities and Exchange Commission (SEC).

This could be a big week for the crypto depending on how markets react to the SEC’s reply to the ongoing lawsuit.

But before we discuss how to take advantage of this opportunity, here are the basics:

What is Ripple?

Ripple is a money transfer network created to serve the needs of financial services.

XRPUSD is a tailored cryptocurrency to work on the Ripple network.

When was it created?

Ripple was founded in 2004 as Ripplepay but the first XRP ledger was launched in 2012.

Why should you care?

Ripple created the XRP token with the goal of solving a real-world problem with blockchain and Cryptocurrency.

Some fun facts about XRP:

You can’t mine Ripple.

The total supply of XRP is capped at 100 billion.

Around 55 billion are in circulation.

It’s down 12% year-to-date.

Over 70% away from its all-time high.

The lowdown…

In December 2020, the SEC sued Ripple for selling digital tokens without registering the token.

Fast-forward to today, although these claims have been partially dismissed by the court – the SEC has asked that Ripple Labs be fined a whopping $2 billion.

This has evolved into an ongoing legal battle, creating much uncertainty over the outlook for Ripple.

The bigger picture

How this legal standoff between Ripple and SEC plays out could significantly impact Ripple’s outlook and market regulation in the wider crypto space.

The SEC must file a sealed reply brief by Monday 6th May and the redacted version (excluding sensitive information) for the public by Wednesday 8th May.

Note: In the lawsuit, the SEC proposed a $2billion fine but Ripple has countered with a much lower settlement of $10 million.

What does this mean?

After over 3 years, the SEC vs Ripple saga could be coming to an end.

The next major step is for the court to decide on the financial penalty size with the final ruling expected between July and September 2024.

A bright spot

Last month, Ripple announced plans to launch a stablecoin pegged 1:1 to the US dollar in 2024.

Note: A stablecoin is a form of digital asset that can be used to make payments.

Should this become a reality, it could boost the utility of XRP – potentially leading to higher prices. Last Friday, Ripple’s CTO David Schwartz announced that more information about the stablecoin will be presented in mid-June.

Focusing on this week…

It’s all about the SEC’s reply to the ongoing lawsuit:

A favorable response from the SEC may reduce the odds of a hefty fine – potentially boosting XRP.

If the SEC presses on with the $2 billion fine and the court case drags on, this could hit XRP.

Looking at the technical…

XRPUSD remains choppy on the daily charts with bulls and bears locked in a fierce tug-of-war.

Support can be found at 0.4750 while resistance is at 0.6650. Still, prices seem to be pushing higher after creating a 2024 low at 0.4059 back in mid-April. However, prices are trading below the 50, 100, and 200-day SMA.

A solid breakout and daily close above 0.5675 could inspire a move toward the 200-day SMA and 0.6650.

Should prices slip back below 0.5350 could trigger a decline towards 0.4750.

Article by ForexTime

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

Cryptocurrencies Financial News

04 May

FX Speculators reduce bearish bets for Yen, Canadian & Australian Dollars

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 April 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 Canadian & Australian Dollars

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

Leading the gains for the currency markets was the Canadian Dollar (13,249 contracts) with the Australian Dollar (13,004 contracts), the Japanese Yen (11,531 contracts), the New Zealand Dollar (3,496 contracts), EuroFX (3,212 contracts), the Swiss Franc (776 contracts), the US Dollar Index (178 contracts) and Bitcoin (6 contracts) also showing positive weeks.

The currencies seeing declines in speculator bets on the week were the Mexican Peso (-4,610 contracts), the British Pound (-2,757 contracts) and the Brazilian Real (-678 contracts).

Speculators reduce bearish bets for Yen, Canadian & Australian Dollars

This week’s COT currency’s data was mixed in the overall big picture and saw a pause in some of the major trends. There were many extremely weak currency positions (JPY, AUD, CAD, CHF, EUR) that saw a little turnaround for the week in their speculator bets while the extremely strong Mexican peso saw a little slide in its bullishness. The US dollar continues to remain in a strong speculative position overall versus just about all of the major currencies except the peso.

Here is this week’s COT currency roundup:

The British pound sterling speculator was one of the currencies that saw a weaker position on the week and contracts have now fallen for two consecutive weeks. The GBP bets have also dropped in six out of the last 7 weeks for a total 7-week change of -99,441 contracts — illuminating the deteriorating sentiment for the GBP. This has dropped the current speculator contract level to a new lowpoint since January 2023.

The Euro bounced back very slightly this week with a gain of +3,212 contracts. The overall net position, however, is now in bearish territory for a second straight week. This is the first time the Euro contracts have been bearish since September of 2022.

The Canadian dollar speculative position has bounced back with two weeks of gains following eight straight weeks of declines. The overall net position (currently at -63,201 contracts) remains extremely bearish with the current strength level at 15 percent of the past three-years range of positions.

Swiss franc speculator positions remain extremely bearish (1 percent strength score) and the overall net speculator position is greater than -40,000 contracts for a second consecutive week. The franc spec positioning is at the lowest levels since 2019.

The Japanese yen contracts got a little relief this week from the continued downtrend with a rise of +11,531 contracts. Previously, the JPY contracts had dropped in 13 out of 15 weeks for a -123,970 contract decline over those 15 weeks. The current speculative sentiment remains near the lowest standing since 2007. The Japanese authorities likely intervened in the currency markets earlier this week in order to pause the steep decline in the yen and the yen managed to end the week higher by approximately 3 percent vs the USD.

The Australian dollar speculator position saw improvement for a second straight week this week with a gain of +13,004 contracts through Tuesday. The Aussie spec position and sentiment have been historically bearish over the past few months with an all-time record low position reached on March 19th at a total of -107,538 contracts. The current positioning level sits at -83,235 contracts.

The Mexican Peso remains the one strong currency in the mix against the US dollar. The MXN speculative position has fallen for three straight weeks but remains in a very strong position with a current total of +119,045 contracts. The MXN speculator level has remained above the +100,000 level for nine consecutive weeks which is the first time that type of streak has taken place since late-2019 into early-2020. The MXN exchange rate versus the USD has experienced a pullback over the past month but remains slightly higher for 2024 so far and closed this week higher by over 1 percent.

Currencies Net 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 & Bitcoin

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 (90 percent) and Bitcoin (66 percent) lead the currency markets this week.

On the downside, the Swiss Franc (1 percent), the US Dollar Index (5 percent), the Japanese Yen (7 percent), the Canadian Dollar (15 percent) and the EuroFX (17 percent) come in at the lowest strength levels currently and are in Extreme-Bearish territory (below 20 percent).

Strength Statistics:
US Dollar Index (4.8 percent) vs US Dollar Index previous week (4.4 percent)
EuroFX (17.4 percent) vs EuroFX previous week (16.1 percent)
British Pound Sterling (34.1 percent) vs British Pound Sterling previous week (35.9 percent)
Japanese Yen (7.2 percent) vs Japanese Yen previous week (0.0 percent)
Swiss Franc (1.4 percent) vs Swiss Franc previous week (0.0 percent)
Canadian Dollar (14.9 percent) vs Canadian Dollar previous week (4.8 percent)
Australian Dollar (22.0 percent) vs Australian Dollar previous week (10.2 percent)
New Zealand Dollar (36.1 percent) vs New Zealand Dollar previous week (26.2 percent)
Mexican Peso (89.9 percent) vs Mexican Peso previous week (92.1 percent)
Brazilian Real (24.1 percent) vs Brazilian Real previous week (25.2 percent)
Bitcoin (66.5 percent) vs Bitcoin previous week (66.4 percent)

Bitcoin & Australian 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 Bitcoin (32 percent) and the Australian Dollar (22 percent) lead the past six weeks trends and are the only positive movers for the currencies.

The British Pound (-54 percent) leads the downside trend scores currently with the Swiss Franc (-38 percent), Japanese Yen (-33 percent) and the New Zealand Dollar (-24 percent) following next with lower trend scores.

Strength Trend Statistics:
US Dollar Index (-1.5 percent) vs US Dollar Index previous week (-13.5 percent)
EuroFX (-23.5 percent) vs EuroFX previous week (-35.9 percent)
British Pound Sterling (-54.5 percent) vs British Pound Sterling previous week (-64.1 percent)
Japanese Yen (-32.8 percent) vs Japanese Yen previous week (-48.5 percent)
Swiss Franc (-37.9 percent) vs Swiss Franc previous week (-44.0 percent)
Canadian Dollar (-19.8 percent) vs Canadian Dollar previous week (-34.6 percent)
Australian Dollar (22.0 percent) vs Australian Dollar previous week (-4.9 percent)
New Zealand Dollar (-23.7 percent) vs New Zealand Dollar previous week (-41.2 percent)
Mexican Peso (-4.7 percent) vs Mexican Peso previous week (9.5 percent)
Brazilian Real (-15.1 percent) vs Brazilian Real previous week (-11.7 percent)
Bitcoin (31.6 percent) vs Bitcoin previous week (15.0 percent)

Individual COT Forex Markets:

US Dollar Index Futures:

The US Dollar Index large speculator standing this week totaled a net position of -35 contracts in the data reported through Tuesday. This was a weekly increase of 178 contracts from the previous week which had a total of -213 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-Extreme with a score of 4.8 percent. The commercials are Bullish-Extreme with a score of 96.0 percent and the small traders (not shown in chart) are Bearish with a score of 37.1 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.

US DOLLAR INDEX Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	68.9	20.3	9.0
– Percent of Open Interest Shorts:	68.9	24.8	4.5
– Net Position:	-35	-2,189	2,224
– Gross Longs:	33,593	9,894	4,410
– Gross Shorts:	33,628	12,083	2,186
– Long to Short Ratio:	1.0 to 1	0.8 to 1	2.0 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	4.8	96.0	37.1
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-1.5	-1.0	14.1

Euro Currency Futures:

The Euro Currency large speculator standing this week totaled a net position of -6,777 contracts in the data reported through Tuesday. This was a weekly advance of 3,212 contracts from the previous week which had a total of -9,989 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-Extreme with a score of 17.4 percent. The commercials are Bullish-Extreme with a score of 85.2 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 6.9 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.

EURO Currency Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	25.6	61.2	11.2
– Percent of Open Interest Shorts:	26.7	62.8	8.5
– Net Position:	-6,777	-10,737	17,514
– Gross Longs:	167,185	399,163	73,035
– Gross Shorts:	173,962	409,900	55,521
– Long to Short Ratio:	1.0 to 1	1.0 to 1	1.3 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	17.4	85.2	6.9
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-23.5	23.7	-13.2

British Pound Sterling Futures:

The British Pound Sterling large speculator standing this week totaled a net position of -28,990 contracts in the data reported through Tuesday. This was a weekly lowering of -2,757 contracts from the previous week which had a total of -26,233 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 34.1 percent. The commercials are Bullish with a score of 70.1 percent and the small traders (not shown in chart) are Bearish with a score of 29.4 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.

BRITISH POUND Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	18.5	68.9	9.0
– Percent of Open Interest Shorts:	30.8	50.4	15.2
– Net Position:	-28,990	43,560	-14,570
– Gross Longs:	43,668	162,366	21,215
– Gross Shorts:	72,658	118,806	35,785
– Long to Short Ratio:	0.6 to 1	1.4 to 1	0.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	34.1	70.1	29.4
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-54.5	56.6	-37.2

Japanese Yen Futures:

The Japanese Yen large speculator standing this week totaled a net position of -168,388 contracts in the data reported through Tuesday. This was a weekly rise of 11,531 contracts from the previous week which had a total of -179,919 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-Extreme with a score of 7.2 percent. The commercials are Bullish-Extreme with a score of 98.1 percent and the small traders (not shown in chart) are Bullish with a score of 58.3 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.

JAPANESE YEN Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	12.1	73.1	12.5
– Percent of Open Interest Shorts:	62.4	20.5	14.8
– Net Position:	-168,388	176,122	-7,734
– Gross Longs:	40,435	244,920	41,917
– Gross Shorts:	208,823	68,798	49,651
– Long to Short Ratio:	0.2 to 1	3.6 to 1	0.8 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	7.2	98.1	58.3
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-32.8	37.7	-27.1

Swiss Franc Futures:

The Swiss Franc large speculator standing this week totaled a net position of -41,786 contracts in the data reported through Tuesday. This was a weekly gain of 776 contracts from the previous week which had a total of -42,562 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-Extreme with a score of 1.4 percent. The commercials are Bullish-Extreme with a score of 100.0 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 2.2 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.

SWISS FRANC Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	11.2	79.3	9.2
– Percent of Open Interest Shorts:	53.4	20.4	25.9
– Net Position:	-41,786	58,283	-16,497
– Gross Longs:	11,040	78,446	9,120
– Gross Shorts:	52,826	20,163	25,617
– Long to Short Ratio:	0.2 to 1	3.9 to 1	0.4 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	1.4	100.0	2.2
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-37.9	37.3	-16.4

Canadian Dollar Futures:

The Canadian Dollar large speculator standing this week totaled a net position of -63,201 contracts in the data reported through Tuesday. This was a weekly advance of 13,249 contracts from the previous week which had a total of -76,450 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-Extreme with a score of 14.9 percent. The commercials are Bullish-Extreme with a score of 87.9 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 6.8 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.

CANADIAN DOLLAR Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	16.0	68.2	13.4
– Percent of Open Interest Shorts:	45.8	34.9	16.8
– Net Position:	-63,201	70,490	-7,289
– Gross Longs:	33,793	144,359	28,321
– Gross Shorts:	96,994	73,869	35,610
– Long to Short Ratio:	0.3 to 1	2.0 to 1	0.8 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	14.9	87.9	6.8
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-19.8	16.7	-6.8

Australian Dollar Futures:

The Australian Dollar large speculator standing this week totaled a net position of -83,235 contracts in the data reported through Tuesday. This was a weekly lift of 13,004 contracts from the previous week which had a total of -96,239 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 22.0 percent. The commercials are Bullish-Extreme with a score of 81.8 percent and the small traders (not shown in chart) are Bearish with a score of 31.1 percent.

Price Trend-Following Model: Weak Downtrend

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

AUSTRALIAN DOLLAR Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	18.4	70.2	9.2
– Percent of Open Interest Shorts:	55.5	29.0	13.3
– Net Position:	-83,235	92,394	-9,159
– Gross Longs:	41,293	157,629	20,613
– Gross Shorts:	124,528	65,235	29,772
– Long to Short Ratio:	0.3 to 1	2.4 to 1	0.7 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	22.0	81.8	31.1
– Strength Index Reading (3 Year Range):	Bearish	Bullish-Extreme	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	22.0	-17.1	-1.6

New Zealand Dollar Futures:

The New Zealand Dollar large speculator standing this week totaled a net position of -8,551 contracts in the data reported through Tuesday. This was a weekly boost of 3,496 contracts from the previous week which had a total of -12,047 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 36.1 percent. The commercials are Bullish with a score of 66.5 percent and the small traders (not shown in chart) are Bearish with a score of 27.7 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.

NEW ZEALAND DOLLAR Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	36.6	57.7	5.5
– Percent of Open Interest Shorts:	51.1	39.7	9.0
– Net Position:	-8,551	10,607	-2,056
– Gross Longs:	21,514	33,942	3,253
– Gross Shorts:	30,065	23,335	5,309
– Long to Short Ratio:	0.7 to 1	1.5 to 1	0.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	36.1	66.5	27.7
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-23.7	25.9	-29.0

Mexican Peso Futures:

The Mexican Peso large speculator standing this week totaled a net position of 119,045 contracts in the data reported through Tuesday. This was a weekly decline of -4,610 contracts from the previous week which had a total of 123,655 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 89.9 percent. The commercials are Bearish-Extreme with a score of 10.1 percent and the small traders (not shown in chart) are Bearish with a score of 38.5 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.

MEXICAN PESO Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	58.1	38.4	2.9
– Percent of Open Interest Shorts:	10.3	87.9	1.2
– Net Position:	119,045	-123,325	4,280
– Gross Longs:	144,679	95,715	7,175
– Gross Shorts:	25,634	219,040	2,895
– Long to Short Ratio:	5.6 to 1	0.4 to 1	2.5 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	89.9	10.1	38.5
– Strength Index Reading (3 Year Range):	Bullish-Extreme	Bearish-Extreme	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-4.7	4.6	-0.2

Brazilian Real Futures:

The Brazilian Real large speculator standing this week totaled a net position of 286 contracts in the data reported through Tuesday. This was a weekly fall of -678 contracts from the previous week which had a total of 964 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 24.1 percent. The commercials are Bullish with a score of 76.3 percent and the small traders (not shown in chart) are Bearish with a score of 34.8 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.

BRAZIL REAL Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	47.0	49.0	2.1
– Percent of Open Interest Shorts:	46.7	49.3	2.0
– Net Position:	286	-321	35
– Gross Longs:	47,281	49,305	2,074
– Gross Shorts:	46,995	49,626	2,039
– Long to Short Ratio:	1.0 to 1	1.0 to 1	1.0 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	24.1	76.3	34.8
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-15.1	17.8	-20.3

Bitcoin Futures:

The Bitcoin large speculator standing this week totaled a net position of 6 contracts in the data reported through Tuesday. This was a weekly rise of 6 contracts from the previous week which had a total of 0 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 Bullish with a score of 51.2 percent and the small traders (not shown in chart) are Bearish with a score of 24.9 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.

BITCOIN Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	78.9	5.2	5.9
– Percent of Open Interest Shorts:	78.9	7.3	3.8
– Net Position:	6	-530	524
– Gross Longs:	19,569	1,291	1,461
– Gross Shorts:	19,563	1,821	937
– Long to Short Ratio:	1.0 to 1	0.7 to 1	1.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	66.5	51.2	24.9
– Strength Index Reading (3 Year Range):	Bullish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	31.6	-45.4	-7.3

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

04 May

Speculator Extremes: Copper, Silver & Commodities Index lead Bullish 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 April 30th 2024.

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:

Copper

The Copper speculator position comes in as the most bullish extreme standing this week. The Copper speculator level is currently at a 99.6 percent score of its 3-year range.

The six-week trend for the percent strength score totaled 27.8 this week. The overall net speculator position was a total of 58,064 net contracts this week with a small decline of -330 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.

Silver

The Silver speculator position comes next in the extreme standings this week. The Silver speculator level is now at a 93.3 percent score of its 3-year range.

The six-week trend for the percent strength score was 2.9 this week. The speculator position registered 54,494 net contracts this week with a weekly drop of -4,846 contracts in speculator bets.

Bloomberg Commodity Index

The Bloomberg Commodity Index speculator position comes in third this week in the extreme standings. The Bloomberg Commodity Index speculator level resides at a 93.2 percent score of its 3-year range.

The six-week trend for the speculator strength score came in at 21.9 this week. The overall speculator position was -2,975 net contracts this week with an edge up by just 4 contracts in the weekly speculator bets.

Coffee

The Coffee speculator position comes up number four in the extreme standings this week. The Coffee speculator level is at a 92.7 percent score of its 3-year range.

The six-week trend for the speculator strength score totaled a change of 17.9 this week. The overall speculator position was 68,590 net contracts this week with a shortfall of -3,324 contracts in the speculator bets.

VIX

The VIX speculator position rounds out the top five in this week’s bullish extreme standings. The VIX speculator level sits at a 90.8 percent score of its 3-year range. The six-week trend for the speculator strength score was 24.2 this week.

The speculator position was -22,433 net contracts this week with a decrease by -4,433 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 -22.2 this week. The overall speculator position was -56,442 net contracts this week with a sharp fall by -25,101 contracts in the speculator bets.

Swiss Franc

The Swiss Franc speculator position comes in next for the most bearish extreme standing on the week. The Swiss Franc speculator level is at a 1.4 percent score of its 3-year range.

The six-week trend for the speculator strength score was -37.9 this week. The speculator position was -41,786 net contracts this week with an edge higher by 776 contracts in the weekly speculator bets.

Ultra 10-Year U.S. T-Note

The Ultra 10-Year U.S. T-Note speculator position comes in as third most bearish extreme standing of the week. The Ultra 10-Year U.S. T-Note speculator level resides at a 2.9 percent score of its 3-year range.

The six-week trend for the speculator strength score was -22.4 this week. The overall speculator position was -263,683 net contracts this week with a decrease of -24,156 contracts in the speculator bets.

US Dollar Index

The US Dollar Index speculator position comes in as this week’s fourth most bearish extreme standing. The US Dollar Index speculator level is at a 4.8 percent score of its 3-year range.

The six-week trend for the speculator strength score was -1.5 this week. The speculator position was -35 net contracts this week with a gain of 178 contracts in the weekly speculator bets.

Sugar

Finally, the Sugar speculator position comes in as the fifth most bearish extreme standing for this week. The Sugar speculator level is at a 5.2 percent score of its 3-year range.

The six-week trend for the speculator strength score was -18.5 this week. The speculator position was 40,305 net contracts this week with a decline of -4,796 contracts in the weekly speculator bets.

Article By InvestMacro – Receive our weekly COT Newsletter

COT Updates Opinions

04 May

COT Metals Charts: Speculator bets led by Gold & Steel

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 April 30th and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets.

Weekly Speculator Changes led by Gold & Steel

The COT metals markets speculator bets were lower this week as two out of the six metals markets we cover had higher positioning while the other four markets had lower speculator contracts.

Leading the gains for the metals was Gold (1,319 contracts) with Steel (1,136 contracts) also recording a positive contract week.

The markets with declines in speculator bets for the week were Silver (-4,846 contracts), Palladium (-1,912 contracts), Platinum (-667 contracts) and with Copper (-330 contracts) also registering lower bets on the week.

Metals Net 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 Copper & Silver

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 Copper (100 percent), Silver (93 percent) and Steel (86 percent) lead the metals markets this week. Gold (68 percent) comes in as the next highest in the weekly strength scores.

On the downside, Palladium (15 percent) comes in at the lowest strength level currently and is in Extreme-Bearish territory (below 20 percent). The next lowest strength score was Platinum (36 percent).

Strength Statistics:
Gold (68.4 percent) vs Gold previous week (67.8 percent)
Silver (93.3 percent) vs Silver previous week (100.0 percent)
Copper (99.6 percent) vs Copper previous week (100.0 percent)
Platinum (36.2 percent) vs Platinum previous week (38.0 percent)
Palladium (15.0 percent) vs Palladium previous week (26.7 percent)
Steel (86.2 percent) vs Palladium previous week (81.8 percent)

Copper tops the 6-Week Strength Trends

COT Strength Score Trends (or move index, calculates the 6-week changes in strength scores) showed that Copper (28 percent) leads the past six weeks trends for metals. Silver (3 percent) is the next highest positive mover in the latest trends data.

Palladium (-6 percent) leads the downside trend scores currently with Steel (-1 percent) as the next market with lower trend scores.

Move Statistics:
Gold (1.2 percent) vs Gold previous week (0.6 percent)
Silver (2.9 percent) vs Silver previous week (25.5 percent)
Copper (27.8 percent) vs Copper previous week (56.3 percent)
Platinum (1.4 percent) vs Platinum previous week (0.1 percent)
Palladium (-6.5 percent) vs Palladium previous week (8.7 percent)
Steel (-0.5 percent) vs Steel previous week (-6.0 percent)

Individual Markets:

Gold Comex Futures:

The Gold Comex Futures large speculator standing this week was a net position of 204,210 contracts in the data reported through Tuesday. This was a weekly lift of 1,319 contracts from the previous week which had a total of 202,891 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 68.4 percent. The commercials are Bearish with a score of 32.5 percent and the small traders (not shown in chart) are Bearish with a score of 49.0 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.

Gold Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	53.6	24.4	9.7
– Percent of Open Interest Shorts:	14.4	68.2	5.2
– Net Position:	204,210	-227,498	23,288
– Gross Longs:	278,850	126,925	50,274
– Gross Shorts:	74,640	354,423	26,986
– Long to Short Ratio:	3.7 to 1	0.4 to 1	1.9 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	68.4	32.5	49.0
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	1.2	-4.1	23.6

Silver Comex Futures:

The Silver Comex Futures large speculator standing this week was a net position of 54,494 contracts in the data reported through Tuesday. This was a weekly decline of -4,846 contracts from the previous week which had a total of 59,340 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 93.3 percent. The commercials are Bearish-Extreme with a score of 2.7 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 81.7 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.

Silver Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	50.0	24.5	19.4
– Percent of Open Interest Shorts:	17.2	69.7	7.0
– Net Position:	54,494	-75,196	20,702
– Gross Longs:	83,094	40,745	32,309
– Gross Shorts:	28,600	115,941	11,607
– Long to Short Ratio:	2.9 to 1	0.4 to 1	2.8 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	93.3	2.7	81.7
– Strength Index Reading (3 Year Range):	Bullish-Extreme	Bearish-Extreme	Bullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	2.9	-13.6	51.1

Copper Grade #1 Futures:

The Copper Grade #1 Futures large speculator standing this week was a net position of 58,064 contracts in the data reported through Tuesday. This was a weekly decline of -330 contracts from the previous week which had a total of 58,394 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 99.6 percent. The commercials are Bearish-Extreme with a score of 0.0 percent and the small traders (not shown in chart) are Bullish with a score of 72.6 percent.

Price Trend-Following Model: Strong Uptrend

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

Copper Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	52.1	22.5	7.9
– Percent of Open Interest Shorts:	32.3	45.2	5.0
– Net Position:	58,064	-66,642	8,578
– Gross Longs:	152,807	66,105	23,247
– Gross Shorts:	94,743	132,747	14,669
– Long to Short Ratio:	1.6 to 1	0.5 to 1	1.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	99.6	0.0	72.6
– Strength Index Reading (3 Year Range):	Bullish-Extreme	Bearish-Extreme	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	27.8	-26.9	6.3

Platinum Futures:

The Platinum Futures large speculator standing this week was a net position of 6,797 contracts in the data reported through Tuesday. This was a weekly lowering of -667 contracts from the previous week which had a total of 7,464 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 36.2 percent. The commercials are Bullish with a score of 60.6 percent and the small traders (not shown in chart) are Bearish with a score of 45.3 percent.

Price Trend-Following Model: Weak Downtrend

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

Platinum Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	53.1	25.6	11.4
– Percent of Open Interest Shorts:	44.6	41.3	4.2
– Net Position:	6,797	-12,570	5,773
– Gross Longs:	42,532	20,552	9,143
– Gross Shorts:	35,735	33,122	3,370
– Long to Short Ratio:	1.2 to 1	0.6 to 1	2.7 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	36.2	60.6	45.3
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	1.4	1.3	-13.6

Palladium Futures:

The Palladium Futures large speculator standing this week was a net position of -11,070 contracts in the data reported through Tuesday. This was a weekly decline of -1,912 contracts from the previous week which had a total of -9,158 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-Extreme with a score of 15.0 percent. The commercials are Bullish-Extreme with a score of 86.5 percent and the small traders (not shown in chart) are Bullish with a score of 59.1 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.

Palladium Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	23.0	56.2	8.5
– Percent of Open Interest Shorts:	69.8	10.6	7.3
– Net Position:	-11,070	10,780	290
– Gross Longs:	5,433	13,294	2,011
– Gross Shorts:	16,503	2,514	1,721
– Long to Short Ratio:	0.3 to 1	5.3 to 1	1.2 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	15.0	86.5	59.1
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-6.5	3.3	30.3

Steel Futures Futures:

The Steel Futures large speculator standing this week was a net position of -2,663 contracts in the data reported through Tuesday. This was a weekly increase of 1,136 contracts from the previous week which had a total of -3,799 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 86.2 percent. The commercials are Bearish-Extreme with a score of 14.4 percent and the small traders (not shown in chart) are Bearish with a score of 42.5 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.

Steel Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	15.0	80.3	1.5
– Percent of Open Interest Shorts:	25.9	69.7	1.1
– Net Position:	-2,663	2,571	92
– Gross Longs:	3,629	19,477	357
– Gross Shorts:	6,292	16,906	265
– Long to Short Ratio:	0.6 to 1	1.2 to 1	1.3 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	86.2	14.4	42.5
– Strength Index Reading (3 Year Range):	Bullish-Extreme	Bearish-Extreme	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-0.5	0.6	-1.9

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