12 Sep

Norway sees a drop in inflation. Natural gas rises amid workers’ strikes in Australia

By JustMarkets 

As of Monday’s stock market close, the Dow Jones Index (US30) increased by 0.25%, while the S&P 500 Index (US500) added 0.67%. The NASDAQ Technology Index (US100) closed positive by 1.14% on Monday. Strengthening tech stocks provided support to the overall market yesterday. Tesla shares rose more than 7% after Morgan Stanley upgraded their rating. Additionally, Qualcomm shares were up more than 3% after Apple extended its contract with the company to supply semiconductor chips for modems for another three years.

On Sunday, US Treasury Secretary Yellen made bullish comments for equities, saying she “feels very good” about the premise of a soft landing as “all inflation indicators are going down,” and she is increasingly confident that the United States will be able to contain inflation without severely damaging the labor market.

Equity markets in Europe were mostly up yesterday. Germany’s DAX (DE40) added 0.39%, France’s CAC 40 (FR40) gained 0.52% on Monday, Spain’s IBEX 35 (ES35) increased by 0.75%, and the UK’s FTSE 100 (UK100) closed 0.25% up.

The European Commission lowered its 2023 eurozone GDP forecast to 0.8% from the previously projected 1.1%. It also lowered the Eurozone inflation forecast for 2023 to 5.6% from the previous forecast of 5.8%. Italian industrial production for July fell by 0.7% m/m, weaker than expectations of 0.3% m/m.

Berenberg currency analysts believe that the leveling of interest rates in the US and Europe, as well as the declining attractiveness of the US dollar as a safe haven, point to the possibility of a revival of the euro in the coming periods. Excess US government debt combined with potential refinancing difficulties could put downward pressure on dollar strength and give confidence to the euro. By the end of 2023, analysts forecast a significant strengthening of the euro against the dollar to 1.1200.

Norwegian inflation slowed more than expected in August. Data showed core inflation falling from 5.4% to 4.8% y/y and core inflation from 6.4% to 6.3% y/y. The consensus forecast pointed to an acceleration. All this raises doubts that Norges Bank will go for further monetary tightening. However, it should be understood that inflation is not as important to Norges Bank as it is to other central banks because Norway’s Central Bank operates on a model-based approach that places great importance on currency fluctuations and oil prices.

On Monday, oil prices fell from their highest in nearly ten months amid concerns about global energy demand after the European Commission cut its Eurozone GDP forecast. But dollar weakness on Monday provided support for energy prices. In addition, crude oil received support last Tuesday when Saudi Arabia and Russia announced an extension of oil production cuts until the end of the year. Oil was also supported by news of increased credit demand in China, the world’s second-largest oil consumer, which could lead to stronger economic growth and energy demand.

On Monday, natural gas prices received support from a rise in European gas prices to a one-week high. LNG production workers at key Chevron facilities in Australia began a partial strike last week after talks with management failed to reach an agreement. The workers said that if no agreement is reached, they will completely stop work for two weeks starting this Thursday.

Asian markets traded flat on Monday. Japan’s Nikkei 225 (JP225) decreased by 0.43% yesterday, China’s FTSE China A50 (CHA50) added 0.67%, Hong Kong’s Hang Seng (HK50) lost 0.58% on the day, and Australia’s S&P/ASX 200 (AU200) was positive by 0.50% on Monday.

In China, authorities returned to strong measures to defend the yuan. This came after the USD/CNY pair rose above the 7.30 level. Along with a much stronger CNY fixing, the PBoC issued a statement saying that market participants should “voluntarily maintain a stable market” and avoid speculative trades. However, sentiment towards China is still wary as other economic indicators for August continued to point to continued unfavorable factors for Asia’s largest economy.

Alibaba shares fell by 1.8% on Tuesday, extending losses after the head of its cloud division unexpectedly resigned this week.

S&P 500 (F)(US500) 4,487.46 +29.97 (+0.67%)

Dow Jones (US30) 34,663.72 +87.13 (+0.25%)

DAX (DE40)  15,800.99 +60.69 (+0.39%)

FTSE 100 (UK100) 7,496.87 +18.68 (+0.25%)

USD Index  104.53 -0.57 (-0.53%)

Important events for today:
  • – Australia NAB Business Confidence (m/m) at 04:30 (GMT+3);
  • – UK Average Earnings Index (m/m) at 09:00 (GMT+3);
  • – UK Claimant Count Change (m/m) at 09:00 (GMT+3);
  • – UK Unemployment Rate (m/m) at 09:00 (GMT+3);
  • – German ZEW Economic Sentiment (m/m) at 12:00 (GMT+3);
  • – Eurozone ZEW Economic Sentiment (m/m) at 12:00 (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
12 Sep

Yen keeps posting flags through ascent

By ForexTime 

  • USDJPY busy forming second flag since August, amidst year-to-date uptrend
  • JPY surged Monday after BoJ Governor Ueda offered hawkish policy clues
  • Yen bulls unable to build on Monday’s intraday low of 145.904.
  • USDJPY may look to close Monday’s gap down
  • Tomorrow’s US CPI to decide USDJPY’s immediate fate

USDJPY gapped down on Monday, September 11th’s market open.

The Yen surged at the onset of the trading week after Bank of Japan governor Kazuo Ueda hinted at the possibility of a first rate hike in Japan since 2007!

The stronger Yen resulted in an intraday low of 145.904 for USDJPY.

This FX pair closed Monday at a zone which could serve as a demand zone-base for a possible second flag, in its ascent from the lows of 141.53 printed on August 7th, 2023.

This close is also below the significant 261.8 Fibonacci level when drawn from 134.772,  January 6th  high to the lows of 16th January 2023 at 127.224 on the weekly chart.

 

Attentions turn to the USD side of USDJPY, with the pivotal US consumer price index due to be released tomorrow (Wednesday, September 13th).

Both bears and bulls will be looking for price action around key levels for pointers to the next impulse direction for the USDJPY.

 

Bulls will be looking to close Monday’s open gap as they climb to the flag’s resistance around 147.769

They will however have to contend with the psychologically important Fibonacci level at 261.8 at 146.985.

 

A bullish flag breakout could see a test of the 148.850 region which had resisted USDJPY bulls back in late-October/early-November 2022.

Further north, lies the potential resistance zone of the upward sloping channel drawn from January 5th, 2023.

 

USDJPY bears on the other hand will be looking for a strong close below the current bullish flag’s support, and also below the psychologically-important 146.00 line.

Such price action may indicate a reversion to its 50-EMA which is below and more than  2600 points away from the current price at the time of writing.

 

Ultimately, much of USDJPY’s immediate fate should rest on tomorrow’s US inflation data release.

  • A higher-than-expected CPI (consumer price index) that ramps up bets of one further Fed rate hike by end-2023 should bolster the US dollar and potentially send USDJPY higher.
  • However, a lower-than-expected CPI that solidifies hopes that the Fed is truly done with its rate hikes should soften the US dollar and potentially drag USDJPY lower.

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
12 Sep

Bitcoin is the currency for AI, attracting institutional investors

By George Prior

Bitcoin’s compatibility with AI technologies is driving major institutional investors to increase their exposure to the cryptocurrency, says the CEO and founder of deVere Group, one of the world’s largest independent financial advisory, asset management and fintech organizations.

Nigel Green says: “The buzz surrounding AI is real – Nvidia’s shares, for example, have jumped almost 210% this year on the frenzy around its uses within AI.

“The AI boom is grounded in tangible technological advancements and the potential to reshape industries across the board.

“The transformative capabilities of AI, coupled with its cross-industry disruption, data-driven nature, and rapid innovation, make it a compelling investment opportunity.

“This is, of course, attracting huge amounts of institutional capital.

“These same institutional investors are increasingly recognising Bitcoin as the currency for the AI era and, therefore, are also increasing their exposure to the world’s largest cryptocurrency.”

There are three key reasons why Bitcoin is the currency for AI and why this synergy is attracting institutional money.

“First, in the world of AI, data integrity is paramount. The ability to trust the source and history of data is crucial, whether it’s for training machine learning models or verifying the authenticity of data inputs.

“Bitcoin’s blockchain provides a tamper-proof record that can be used to ensure data integrity in AI applications,” notes Nigel Green.

“Second, Bitcoin’s borderless nature facilitates seamless cross-border transactions, enabling AI companies to access the resources they need without the limitations of traditional financial systems, such as high fees and lengthy processing times.

“Third, AI relies heavily on data, and organisations are increasingly seeking ways to monetise their data assets.

“Bitcoin opens-up new possibilities for data marketplace platforms where AI-focused firms can access and purchase datasets with ease, creating a thriving ecosystem of data sharing and monetisation.”

As AI continues to advance, new use cases for Bitcoin in AI applications will inevitably emerge. Research and innovation at the intersection of AI and crypto are likely to unlock even more opportunities for synergy between the two fields.

Institutional investors are forward-thinking and recognise the potential for substantial returns on their investments in this rapidly evolving space.

“As both Bitcoin and AI technologies continue to evolve, their integration is set to drive innovation and transformation in various industries, reshaping the way we perceive and interact with both digital currencies and artificial intelligence.

“The growing interest from institutional investors underscores the enormous potential of this partnership and further validates Bitcoin’s role in the future of AI,” concludes Nigel Green.

About:

deVere Group is one of the world’s largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients.  It has a network of offices across the world, over 80,000 clients and $12bn under advisement.

Cryptocurrencies Financial News
11 Sep

ECB could push EU into long recession with rate rise on Thursday

By George Prior

The European Central Bank would risk plunging the European Union into a long recession if it decides to raise interest rates at its pivotal meeting on Thursday, following the growth downgrades of the bloc by the European Commission.

This is the stark warning from Nigel Green, CEO and founder of deVere Group, one of the world’s largest independent financial advisory, asset management and fintech organizations, after the Commission, the executive arm of the EU, said on Monday that the economy will expand by just 0.8% this year and 1.4% in 2024.

The figures represent a downgrade from predictions by Brussels in May of 1% growth in 2023 and 1.7% next year.

The Commission also said that Germany is set for an extended recession in 2023 – it’s the only major European economy to witness an economic contraction this year.

Nigel Green comments: “It’s reported that the ECB’s decision on whether to raise interest rates or not on Thursday is on a knife-edge. This is because the central bank is having to deal with stalling growth and persistently high inflation.

“But we urge the ECB to refrain from raising interest rates considering the economic context and potential consequences.”

He continues: “The 0.4% contraction in Germany’s economy, coupled with the European Commission’s downward revision of growth expectations, suggests that the trajectory might be less stable than anticipated.

“In such a precarious environment, raising interest rates would further hinder economic growth and job creation.

“The largest economy in Europe is already struggling. Higher borrowing costs for businesses and consumers will further stifle investment and consumption, which are essential drivers of economic recovery. With Germany’s economy facing headwinds, it is crucial to maintain affordable-as-possible financing options to support businesses and individuals alike.

“Due to its size and influence, should the economic situation in Germany get worse due to further rate rises, there’s a real risk that the wider EU could be plunged into a long recession.”

The deVere CEO goes on to add: “The time lag for monetary policies is incredibly lengthy. It takes around 18 months for the full effect of rate hikes to make their way into the economy – and that’s where we are – and so financial conditions will get squeezed even harder in the near term.”

The ECB must also consider the economic divergence within the Eurozone. Raising interest rates could exacerbate disparities and potentially lead to further divergence among Eurozone countries.

It is crucial for the ECB to communicate its intentions clearly, notes the deVere CEO, to the markets and the public. Raising interest rates without adequate explanation could lead to market volatility and confusion, which are detrimental to economic stability.

He concludes: “Despite the risks of steering the wider EU into a recession with another rate rise, we expect that the ECB will argue it is still too soon to pause in its battle against inflation and, therefore, will go for one final hike on Thursday.”

About:

deVere Group is one of the world’s largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients.  It has a network of offices across the world, over 80,000 clients and $12bn under advisement.

Economics & Fundamentals Financial News
11 Sep

EUR/USD Braces for Pivotal Week Ahead: An In-Depth Look

By RoboForex Analytical Department

The EUR/USD currency pair kicked off the week on a vibrant note, trading around 1.0720. The days ahead promise a series of impactful events that could influence the pair’s trajectory.

In the U.S., critical inflation data for August is set to be released this week. Year-over-year Consumer Price Index (CPI) figures are expected to have increased to 3.6%, up from 3.2% the prior month. On the eve of the Federal Reserve’s upcoming meeting, this uptick could bring mixed sentiments. In contrast, core inflation is projected to decline to 4.3% year-over-year from the previous 4.7%.

Across the Atlantic, the European Central Bank (ECB) is scheduled to convene on Thursday to determine interest rate policy. Given the precarious state of the Eurozone’s economy, the consensus expectation is that the ECB will opt to maintain its current interest rate of 3.75% per annum. Any statements or actions from the ECB are expected to significantly influence the euro’s value.

Technical Analysis of the EUR/USD Currency Pair

On the 4-hour chart, EUR/USD recently completed a downward wave at 1.0686. In the short term, the market could experience a corrective rally towards 1.0755. Upon reaching this level, a fresh downward structure targeting 1.0680 may ensue. Subsequently, a bullish wave could set its sights on 1.0911. The Moving Average Convergence Divergence (MACD) indicator lends technical support to this scenario; its signal line is currently below zero but appears to be gearing up for an upward move.

On the 1-hour chart, a consolidation zone has taken shape around 1.0720. The market at one point extended this range upward and could potentially trend towards 1.0755. Once this price level is attained, a downward movement towards 1.0680 may commence. This viewpoint gains technical validation from the Stochastic oscillator, whose signal line has recently recoiled from the 80 mark and is now oriented downward, possibly heading towards the 20 level.

In summary, the EUR/USD pair faces a week rich in potential catalysts, with key data releases and policy meetings in both the U.S. and Eurozone. Both short-term and medium-term technical analyses suggest a mixed outlook, with opportunities for both upward corrections and renewed declines. Keep a close eye on economic indicators and central bank actions as they could drastically alter the landscape.

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
11 Sep

Will iPhone 15 event help Apple recover $200bn lost last week?

By George Prior

Apple’s iPhone 15 event on Tuesday will boost stock prices for shareholders but it will not be enough to recover its stock market valuation which fell by more than 6%, or almost $200bn (£160bn), in two days last week.

This is the prediction from Nigel Green, CEO and founder of deVere Group, one of the world’s largest independent financial advisory, asset management and fintech organizations, who goes on to say that investors will see a dip in the stock price as a buying opportunity.

Stock prices fell after reports that Chinese government workers have been banned from using iPhones.

He comments: “Apple’s new iPhone showcase on Tuesday, dubbed ‘Wonderlust’ is expected to unveil new hardware, including the iPhone 15 and Apple Watch models.

“Apple’s iPhone events typically generate significant buzz and anticipation, leading to a surge in sales. This in turn will boost stock prices for shareholders in the short-term.

“However, we don’t expect it to be enough to recover its full stock market valuation which fell by more than 6%, or almost $200bn in two days last week.”

The deVere Group CEO continues: “This is not because of the issue of Beijing reportedly banning government workers using iPhones.  The impact of this move has been greatly exaggerated.

“The drop in stock prices comes at the same time as the release of an important rival phone in China, the Huawei Mate 60.

“It also comes at a time when Apple has had three consecutive quarters of declining sales due to the macroeconomic climate in the market with major headwinds for consumption across the board.

“These should be the main reasons stock prices fell last week, not the knee-jerk reaction to a ban that affects only around 500,000 government employees’ phones.

“And as these real reasons remain in the short term, we believe it will be a struggle for Apple to make up the stock market valuation with Tuesday’s event.”

But, says Nigel Green, the dip in stock price “will be used by savvy investors as a buying opportunity.”

He notes: “The robust fundamentals of the biggest company remain unchanged. It has huge amounts of capital and expertise, dominates the market, and is amazingly adaptable – which is critical.

“This is evidenced by Apple CEO Tim Cook, despite being the head of a major US company, has managed – so far at least – being viewed by Beijing as almost ‘independent’ from the US, which many other major brands haven’t been able to pull off.

“For me personally, Apple remains a ‘buy’.”

He concludes: “We don’t expect the iPhone 15 event on Tuesday to rock the world for Apple shareholders, but global investors will not be ruling the company out – if anything they’ll be using the volatility as an opportunity.”

About:

deVere Group is one of the world’s largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients.  It has a network of offices across the world, over 80,000 clients and $12bn under advisement.

Financial News Stock Market News
11 Sep

Analysts forecast a significant euro rise by the year’s end. Inflation in China returned to positive dynamics

By JustMarkets

At the close of the stock market on Friday, the Dow Jones Index (US30) increased by 0.22% (-0.86% for the week), while the S&P 500 Index (US500) added 0.14% (-1.61% for the week). The NASDAQ Technology Index (US100) closed positive by 0.09% on Friday (-2.61% for the week). Strengthening crude oil prices on Friday boosted energy stocks and the broader market. Stocks also received support as the likelihood grew regarding a pause in Fed rate hikes amid comments from Dallas FRB Governor Lorie Logan, who stated the following: “Another pass at raising interest rates may be appropriate at the FOMC meeting later this month.” Markets rate the odds of a 25 bps rate hike at the September 20 FOMC meeting at 7% and a 25 bps rate hike at the November 1 FOMC meeting at 48%.

Friday’s US economic news was negative for equities after consumer credit rose by $10.399 billion in July, weaker than expectations of $16.000 billion. On Friday, Canadian labor market data was released. In July, the number of employed in the Canadian economy increased by 39.9k, which was above expectations of 18.9k. The unemployment rate remained at 5.5%. A more detailed report showed that overall, Canada’s labor market remains resilient, but imbalances in certain sectors are widening, which could lead to problems in the future.

A draft document prepared by G-20 leaders meeting this weekend in India warned that “cascading crises” pose challenges to long-term economic growth and called for coordinated macroeconomic policies to support the global economy. In addition, global economic growth is uneven and below the long-term average as uncertainty about the economic outlook remains high, and the balance of risks tilts to the downside.

Equity markets in Europe were mostly up on Friday. Germany’s DAX (DE40) increased by 0.14% (-1.03% for the week), France’s CAC 40 (FR40) gained 0.62% (-1.25% for the week), Spain’s IBEX 35 (ES35) added 0.61% (-1.27% for the week), and the UK’s FTSE 100 (UK100) closed up by 0.49% (+0.18% for the week).

Berenberg currency analysts believe that the leveling of interest rates in the US and Europe, as well as the declining attractiveness of the US dollar as a safe haven, point to the possibility of a revival of the euro in the coming periods. Excess US government debt combined with potential refinancing difficulties could put downward pressure on dollar strength and give confidence to the euro. By the end of 2023, analysts forecast a significant strengthening of the euro against the dollar to 1.1200.

Asian markets were predominantly up last week. Japan’s Nikkei 225 (JP225) decreased by 0.58% for the week, China’s FTSE China A50 (CHA50) fell by 2.77%, Hong Kong’s Hang Seng (HK50) ended the week down by 2.10%, and Australia’s S&P/ASX 200 (AU200) ended the week negative by 1.67%.

HSBC currency strategists revised downward their forecasts for the Australian (AUD) and New Zealand (NZD) dollars against the US dollar (USD). Firstly, they assume that AUD and NZD will experience a weakening trend before stabilizing in the second quarter of 2024, with AUD/USD and NZD/USD rates reaching 0.62 and 0.55, respectively, by the end of the first half of 2024.

Bank of Japan Governor Kazuo Ueda said over the weekend that the central bank may end its negative interest rate policy when the 2% inflation target is reached, indicating a possible interest rate hike. Ueda said the central bank may have enough data by the end of the year to determine whether it can end negative rates. Currently, the BoJ is targeting short-term interest rates at 0.1% as part of its negative rate policy. In addition, 10-year government bond yields are at zero as part of efforts to revitalize the economy and sustainably meet targets.

Consumer prices in China returned to positive momentum in August, while the decline in factory prices slowed. According to the National Bureau of Statistics, the Consumer Price Index (CPI) rose by 0.1% year-on-year in August, slower than the median estimate of a 0.2% increase. The CPI declined by 0.3% in July. Core inflation, which excludes food and fuel prices, was unchanged at 0.8% in August. The Producer Price Index (PPI) fell by 3.0% from a year earlier, which was in line with expectations, after falling by 4.4% in July. According to analysts, overall, rate inflation still points to weak demand and requires more active policy support from the government.

S&P 500 (F)(US500) 4,457.49 +6.35 (+0.14%)

Dow Jones (US30) 34,576.59 +75.86 (+0.22%)

DAX (DE40)  15,740.30 +21.64 (+0.14%)

FTSE 100 (UK100) 7,478.19 +36.47 (+0.49%)

USD Index  105.07 +0.01 (+0.01%)

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
11 Sep

Trade Of The Week: Gold Outlook Hinges On US CPI Data

By ForexTime

Gold prices caught our attention on Monday morning after briefly punching above $1930 as the dollar retreated.

Over the last few weeks, the precious metal has been influenced by conflicting forces and this continues to be reflected in the choppy price action. The potent cocktail of themes ranging from Fed hike expectations, global growth concerns, and dollar volatility among others have trapped prices within a wide range.

Bulls and bears remain engaged in a fierce tug of war with a fresh fundamental spark needed to shift the scales of power in one direction. Regarding the technical outlook, gold is still respecting a bearish channel on the weekly charts. However, strong support can be found at $1915 – a level where the 200-day SMA resides. 

This could be an intense week for gold and here are 3 reasons why:

  1. US August CPI report 

The August US Consumer Price Index (CPI) report published on Wednesday, September 13 will act as a critical piece of information that determines whether the Fed will keep rates higher for longer.

Given gold’s zero-yielding nature, this pending report has the potential to trigger explosive levels of volatility.

Market expectations for US August CPI:

  • CPI year-on-year (August 2023 vs. August 2022) to rise 3.6% from 3.2% in the prior month.
  • Core CPI year-on-year to rise 4.3% from 4.7% seen in July.
  • CPI month-on-month (August 2023 vs. August 2023) to rise 0.6% from 0.2% in the prior month.
  • Core CPI month-on-month to remain unchanged at 0.2% from 0.2% seen in July.

Headline inflation is expected to jump thanks to higher energy costs, but all eyes will be on the core CPI figures which are forecast to remain unchanged month-on-month. Ultimately, further signs of cooling inflationary pressures may feed the argument around the Fed concluding its hiking cycle.

It is worth noting that traders are currently pricing in a 7% probability of a 25-basis point hike this month, with this jumping to 44% by November, according to Fed funds futures.

  • Gold prices could shine if the inflation numbers print below market forecast, as signs of slowing inflation strengthen the argument around the Fed already finished with hikes in 2023.
  • Should the inflation figures print above market forecasts, gold prices are likely to depreciate as expectations rise around the Fed having headroom to hike one time this year.

  1. US data dump 

After the main course, which is the US CPI report, investors will be dished out more key US economic reports in the second half of the trading week to complete the meal.

All eyes will be on the US retail sales, PPI, initial jobless claims, industrial production, and University of Michigan consumer sentiment which could provide insight into the health of the US economy. When factoring the Fed’s emphasis on data-dependence when it comes to monetary policy decisions, this data dump could trigger dollar volatility – ultimately impacting gold prices.

  • Should the overall US economic data print below market expectations, this may weaken the dollar – pushing gold prices higher.
  • If overall US economic data prints above expectations, the dollar could receive a boost – dragging gold prices lower.

  1. Technical forces 

Despite rebounding from the 200-day SMA, gold prices remain trapped within a range on the daily charts with support at $1915 and resistance at $1931 where the 50-day SMA resides.

Gold could be in the process of a technical rebound or pullback with both technical and fundamental forces determining where prices conclude the week.

  • A solid daily breakout and close above $1931 could signal a move higher with the next key level of interest found at $1953.
  • Should prices slip back under the $1915 support, this may invite bears to attack $1900 and $1885, respectively.

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 Metals
10 Sep

Interest Rates: From 0% to Above 5% — to …?

“The lines in the chart will turn up, and no policy will stop it”

By Elliott Wave International

As you’re probably aware, many people who want to borrow to make a major purchase like a house or a car are bemoaning higher interest rates.

It wasn’t so long ago that 3-month T-bill rates were around zero, and at least one prominent figure at the Federal Reserve said rates needed to stay super low for a good while.

Indeed, let’s go back to this June 18, 2021 headline (CNBC):

Fed’s Kashkari opposed to rate hikes at least through 2023

Well, as Elliott Wave International has said time and again, the market determines the trend of bond yields (and interest rates), not the Fed. The Fed merely follows the bond market.

Nearly a month after that Fed official called for a continuation of very low rates, the July 13, 2021 Elliott Wave Theorist offered its own perspective via this chart and commentary (The Elliott Wave Theorist is a monthly publication which provides insights into major financial and social trends):

Rates at Zero, but Not for Long

[The chart] shows that U.S. Treasury bill rates have edged closer and closer to zero …. Nonexistent T-bill yields are due to one thing: historically elevated social mood. … When optimism and complacency finally melt like popsicles in the sun, the lines in [the chart] will turn up, and no policy will stop it.

Fast forward to the just-published August 2023 Elliott Wave Theorist, which provides an update on that July 2021 call with this chart:

As you can see, since our forecast, the 3-month T-bill rates have climbed from around zero to north of 5%. The black arrow points to the juncture at which the July 2021 Theorist made that noteworthy forecast. Mind you, Elliott Wave International was almost alone in making such a call.

Is the rise in interest rates over?

Well, at least one observer says “no.” This Aug. 18 Fox Business caption captures the view of a contributor to a news and opinion website:

[Financial and economics editor]: Interest rates will go higher than Americans think

This is in stark contrast to a recent Reuters poll of economists, the majority of whom say that interest rates have plateaued.

Who’s right?

You may want to check out a chart of bond yields and its Elliott wave structure.

If you’re unfamiliar with Elliott wave analysis, read Frost & Prechter’s Wall Street classic, Elliott Wave Principle: Key to Market Behavior. Here’s a quote from the book:

Without Elliott, there appear to be an infinite number of possibilities for market action. What the Wave Principle provides is a means of first limiting the possibilities and then ordering the relative probabilities of possible future market paths. Elliott’s highly specific rules reduce the number of valid alternatives to a minimum.

If you’d like to find out about “Elliott’s highly specific rules,” you can do so by reading the online version of Elliott Wave Principle: Key to Market Behavior for free.

That’s right — Elliott Wave International has made this definitive text on Elliott wave analysis available to Club EWI members for free. A Club EWI membership is also free and members enjoy free access to a wealth of Elliott wave educational resources.

Join the approximately 500,000 Club EWI members who are already gaining insights into trading and investing from an Elliott wave perspective by following this link: Elliott Wave Principle: Key to Market Behavior(get free access now).

This article was syndicated by Elliott Wave International and was originally published under the headline Interest Rates: From 0% to Above 5% — to …?. EWI is the world’s largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

Bonds Economics & Fundamentals Financial News
10 Sep

Currency Speculators drop Australian Dollar bets for 9th time in 10 weeks

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 September 5th 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 US Dollar Index & Bitcoin

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 Japanese Yen (1,337 contracts) with the US Dollar Index (536 contracts) and Bitcoin (532 contracts) also showing positive weeks.

The currencies seeing declines in speculator bets on the week were the Australian Dollar (-13,352 contracts), EuroFX (-10,448 contracts), Canadian Dollar (-9,202 contracts), the Mexican Peso (-6,342 contracts), the New Zealand Dollar (-3,624 contracts), Brazilian Real (-2,655 contracts), the British Pound (-2,017 contracts) and the Swiss Franc (-807 contracts) also registering lower bets on the week.

Large Currency Speculators drop Australian Dollar bets for 9th time in 10 weeks

Highlighting the COT currency’s data this week is the continued weakness of the speculator’s positioning for the Australian dollar. Large speculative currency positions for the Aussie dropped this week by over -13,000 net contracts and fell for the fourth consecutive week as well as for the ninth time out of the past ten weeks.

The AUD positioning has now shed a total of -40,345 contracts over these past four weeks and this has brought the overall net speculator standing (currently at -83,352 contracts) to the lowest level in the past eighty weeks, dating back to February 2nd of 2022 when the net position was -84,080 contracts. The 3-Year Strength Index is showing a 7.4 percent score for the AUD, marking an extreme bearish reading for speculators this week.

The Australian dollar has been in a downtrend over the course in 2023 after opening the year at approximately the 0.6815 exchange rate and this week touched the lowest level since November of 2022 at a low of 0.6360.

Hurting the AUD’s exchange against the US Dollar is the interest rate disparity and the possible future divergence of the central banks with the US Federal Reserve possibly continuing to raise its benchmark rate (currently at 5.25-5.50%) while the Reserve Bank of Australia is assumed to be finished boosting its rate (currently at 4.10%).

Data Snapshot of Forex Market Traders | Columns Legend
Sep-05-2023OIOI-IndexSpec-NetSpec-IndexCom-NetCOM-IndexSmalls-NetSmalls-Index
USD Index36,579263,35931-5,005681,64626
EUR754,26365136,23177-175,8542439,62342
GBP225,4045246,38488-49,955183,57165
JPY268,34490-97,13612105,86787-8,73136
CHF46,67059-5,3254210,68759-5,36242
CAD189,66055-24,9633129,46176-4,49813
AUD241,201100-83,537795,36690-11,82924
NZD56,46279-14,0001617,29187-3,29111
MXN246,0615467,52180-71,732194,21138
RUB20,93047,54331-7,15069-39324
BRL34,8711913,93354-15,569461,63650
Bitcoin14,962692,039100-2,534049524

 

Strength Scores led by Bitcoin & 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 Bitcoin (100 percent) and the British Pound (88 percent) lead the currency markets this week. The Mexican Peso (80 percent), EuroFX (77 percent) and the Brazilian Real (54 percent) come in as the next highest in the weekly strength scores.

On the downside, the Australian Dollar (7 percent), the Japanese Yen (12 percent) and the New Zealand Dollar (16 percent) come in at the lowest strength levels currently and are in Extreme-Bearish territory (below 20 percent).

Strength Statistics:
US Dollar Index (30.5 percent) vs US Dollar Index previous week (29.6 percent)
EuroFX (77.1 percent) vs EuroFX previous week (81.5 percent)
British Pound Sterling (88.0 percent) vs British Pound Sterling previous week (89.4 percent)
Japanese Yen (12.3 percent) vs Japanese Yen previous week (11.5 percent)
Swiss Franc (41.9 percent) vs Swiss Franc previous week (44.1 percent)
Canadian Dollar (31.3 percent) vs Canadian Dollar previous week (39.8 percent)
Australian Dollar (7.4 percent) vs Australian Dollar previous week (19.8 percent)
New Zealand Dollar (15.6 percent) vs New Zealand Dollar previous week (25.5 percent)
Mexican Peso (80.3 percent) vs Mexican Peso previous week (84.2 percent)
Brazilian Real (53.5 percent) vs Brazilian Real previous week (56.9 percent)
Bitcoin (100.0 percent) vs Bitcoin previous week (91.8 percent)

 

Bitcoin & Swiss Franc 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 (42 percent) and the Swiss Franc (8 percent) lead the past six weeks trends for the currencies.

The New Zealand Dollar (-35 percent) leads the downside trend scores currently with the Australian Dollar (-30 percent), the Canadian Dollar (-28 percent) and the Brazilian Real (-23 percent) following next with lower trend scores.

Strength Trend Statistics:
US Dollar Index (-4.5 percent) vs US Dollar Index previous week (-13.7 percent)
EuroFX (-17.2 percent) vs EuroFX previous week (-13.5 percent)
British Pound Sterling (-8.8 percent) vs British Pound Sterling previous week (-10.6 percent)
Japanese Yen (-11.5 percent) vs Japanese Yen previous week (-4.9 percent)
Swiss Franc (8.5 percent) vs Swiss Franc previous week (15.6 percent)
Canadian Dollar (-28.4 percent) vs Canadian Dollar previous week (-15.2 percent)
Australian Dollar (-30.0 percent) vs Australian Dollar previous week (-18.3 percent)
New Zealand Dollar (-35.4 percent) vs New Zealand Dollar previous week (-18.3 percent)
Mexican Peso (-12.4 percent) vs Mexican Peso previous week (-12.6 percent)
Brazilian Real (-22.9 percent) vs Brazilian Real previous week (-22.1 percent)
Bitcoin (41.6 percent) vs Bitcoin previous week (41.4 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 3,359 contracts in the data reported through Tuesday. This was a weekly increase of 536 contracts from the previous week which had a total of 2,823 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 30.5 percent. The commercials are Bullish with a score of 67.8 percent and the small traders (not shown in chart) are Bearish with a score of 25.6 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.

US DOLLAR INDEX StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:62.620.412.5
– Percent of Open Interest Shorts:53.434.08.0
– Net Position:3,359-5,0051,646
– Gross Longs:22,8817,4484,587
– Gross Shorts:19,52212,4532,941
– Long to Short Ratio:1.2 to 10.6 to 11.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):30.567.825.6
– Strength Index Reading (3 Year Range):BearishBullishBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-4.52.116.9

 

Euro Currency Futures:

Euro Currency Futures COT ChartThe Euro Currency large speculator standing this week came in at a net position of 136,231 contracts in the data reported through Tuesday. This was a weekly decline of -10,448 contracts from the previous week which had a total of 146,679 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 77.1 percent. The commercials are Bearish with a score of 23.7 percent and the small traders (not shown in chart) are Bearish with a score of 42.2 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: New Sell – Short Position.

EURO Currency StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:31.353.911.9
– Percent of Open Interest Shorts:13.277.26.7
– Net Position:136,231-175,85439,623
– Gross Longs:235,732406,48590,003
– Gross Shorts:99,501582,33950,380
– Long to Short Ratio:2.4 to 10.7 to 11.8 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):77.123.742.2
– Strength Index Reading (3 Year Range):BullishBearishBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-17.221.8-27.8

 

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 46,384 contracts in the data reported through Tuesday. This was a weekly reduction of -2,017 contracts from the previous week which had a total of 48,401 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 88.0 percent. The commercials are Bearish-Extreme with a score of 17.7 percent and the small traders (not shown in chart) are Bullish with a score of 65.0 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.

BRITISH POUND StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:41.137.315.0
– Percent of Open Interest Shorts:20.559.513.4
– Net Position:46,384-49,9553,571
– Gross Longs:92,64584,12933,867
– Gross Shorts:46,261134,08430,296
– Long to Short Ratio:2.0 to 10.6 to 11.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):88.017.765.0
– Strength Index Reading (3 Year Range):Bullish-ExtremeBearish-ExtremeBullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-8.815.1-28.3

 

Japanese Yen Futures:

Japanese Yen Forex Futures COT ChartThe Japanese Yen large speculator standing this week came in at a net position of -97,136 contracts in the data reported through Tuesday. This was a weekly lift of 1,337 contracts from the previous week which had a total of -98,473 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 12.3 percent. The commercials are Bullish-Extreme with a score of 87.3 percent and the small traders (not shown in chart) are Bearish with a score of 35.7 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.

JAPANESE YEN StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:13.871.113.0
– Percent of Open Interest Shorts:50.031.716.3
– Net Position:-97,136105,867-8,731
– Gross Longs:37,014190,80434,930
– Gross Shorts:134,15084,93743,661
– Long to Short Ratio:0.3 to 12.2 to 10.8 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):12.387.335.7
– Strength Index Reading (3 Year Range):Bearish-ExtremeBullish-ExtremeBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-11.59.40.1

 

Swiss Franc Futures:

Swiss Franc Forex Futures COT ChartThe Swiss Franc large speculator standing this week came in at a net position of -5,325 contracts in the data reported through Tuesday. This was a weekly decrease of -807 contracts from the previous week which had a total of -4,518 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 41.9 percent. The commercials are Bullish with a score of 59.1 percent and the small traders (not shown in chart) are Bearish with a score of 41.9 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.

SWISS FRANC StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:24.648.226.1
– Percent of Open Interest Shorts:36.025.337.6
– Net Position:-5,32510,687-5,362
– Gross Longs:11,49422,50812,168
– Gross Shorts:16,81911,82117,530
– Long to Short Ratio:0.7 to 11.9 to 10.7 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):41.959.141.9
– Strength Index Reading (3 Year Range):BearishBullishBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:8.513.1-37.3

 

Canadian Dollar Futures:

Canadian Dollar Forex Futures COT ChartThe Canadian Dollar large speculator standing this week came in at a net position of -24,963 contracts in the data reported through Tuesday. This was a weekly fall of -9,202 contracts from the previous week which had a total of -15,761 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 31.3 percent. The commercials are Bullish with a score of 76.2 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 12.8 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: New Sell – Short Position.

CANADIAN DOLLAR StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:24.154.817.1
– Percent of Open Interest Shorts:37.339.319.5
– Net Position:-24,96329,461-4,498
– Gross Longs:45,761103,95932,462
– Gross Shorts:70,72474,49836,960
– Long to Short Ratio:0.6 to 11.4 to 10.9 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):31.376.212.8
– Strength Index Reading (3 Year Range):BearishBullishBearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-28.435.1-46.8

 

Australian Dollar Futures:

Australian Dollar Forex Futures COT ChartThe Australian Dollar large speculator standing this week came in at a net position of -83,537 contracts in the data reported through Tuesday. This was a weekly decline of -13,352 contracts from the previous week which had a total of -70,185 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 7.4 percent. The commercials are Bullish-Extreme with a score of 90.1 percent and the small traders (not shown in chart) are Bearish with a score of 23.6 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.

AUSTRALIAN DOLLAR StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:22.460.610.0
– Percent of Open Interest Shorts:57.021.114.9
– Net Position:-83,53795,366-11,829
– Gross Longs:54,032146,17624,035
– Gross Shorts:137,56950,81035,864
– Long to Short Ratio:0.4 to 12.9 to 10.7 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):7.490.123.6
– Strength Index Reading (3 Year Range):Bearish-ExtremeBullish-ExtremeBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-30.034.2-32.8

 

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 -14,000 contracts in the data reported through Tuesday. This was a weekly fall of -3,624 contracts from the previous week which had a total of -10,376 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 15.6 percent. The commercials are Bullish-Extreme with a score of 87.2 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 10.8 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.

NEW ZEALAND DOLLAR StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:29.860.35.2
– Percent of Open Interest Shorts:54.629.711.0
– Net Position:-14,00017,291-3,291
– Gross Longs:16,84734,0682,947
– Gross Shorts:30,84716,7776,238
– Long to Short Ratio:0.5 to 12.0 to 10.5 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):15.687.210.8
– Strength Index Reading (3 Year Range):Bearish-ExtremeBullish-ExtremeBearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-35.440.7-50.0

 

Mexican Peso Futures:

Mexican Peso Futures COT ChartThe Mexican Peso large speculator standing this week came in at a net position of 67,521 contracts in the data reported through Tuesday. This was a weekly lowering of -6,342 contracts from the previous week which had a total of 73,863 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 80.3 percent. The commercials are Bearish-Extreme with a score of 18.6 percent and the small traders (not shown in chart) are Bearish with a score of 38.0 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 StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:40.851.82.9
– Percent of Open Interest Shorts:13.380.91.2
– Net Position:67,521-71,7324,211
– Gross Longs:100,298127,3727,084
– Gross Shorts:32,777199,1042,873
– Long to Short Ratio:3.1 to 10.6 to 12.5 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):80.318.638.0
– Strength Index Reading (3 Year Range):Bullish-ExtremeBearish-ExtremeBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-12.412.1-0.0

 

Brazilian Real Futures:

Brazil Real Futures COT ChartThe Brazilian Real large speculator standing this week came in at a net position of 13,933 contracts in the data reported through Tuesday. This was a weekly decrease of -2,655 contracts from the previous week which had a total of 16,588 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 53.5 percent. The commercials are Bearish with a score of 45.5 percent and the small traders (not shown in chart) are Bearish with a score of 49.7 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:58.730.69.5
– Percent of Open Interest Shorts:18.875.34.8
– Net Position:13,933-15,5691,636
– Gross Longs:20,47310,6813,318
– Gross Shorts:6,54026,2501,682
– Long to Short Ratio:3.1 to 10.4 to 12.0 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):53.545.549.7
– Strength Index Reading (3 Year Range):BullishBearishBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-22.920.215.4

 

Bitcoin Futures:

Bitcoin Crypto Futures COT ChartThe Bitcoin large speculator standing this week came in at a net position of 2,039 contracts in the data reported through Tuesday. This was a weekly increase of 532 contracts from the previous week which had a total of 1,507 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 100.0 percent. The commercials are Bearish-Extreme with a score of 0.0 percent and the small traders (not shown in chart) are Bearish with a score of 24.2 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.

BITCOIN StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:79.80.78.1
– Percent of Open Interest Shorts:66.117.64.8
– Net Position:2,039-2,534495
– Gross Longs:11,9331051,218
– Gross Shorts:9,8942,639723
– Long to Short Ratio:1.2 to 10.0 to 11.7 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):100.00.024.2
– Strength Index Reading (3 Year Range):Bullish-ExtremeBearish-ExtremeBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:41.6-64.3-7.5

 

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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