InvestMacro

Fed Meeting: Powell will talk tough to spook markets

By George Prior

Federal Reserve policymakers will raise interest rates today and Chair Jerome Powell will talk tough to intentionally spook the markets, predicts the CEO of one of the world’s largest financial advisory, asset management and fintech organizations.

The prediction from deVere Group’s Nigel Green comes ahead of the Fed’s latest interest rate policy decision and press conference planned for Wednesday afternoon (ET).

He comments: “Following a pause last time, we expect officials at the US central bank will raise rates again today, taking them to their highest level in 22 years.

“The FOMC, we believe, will raise rates .25, to the 5.25% to 5.5% range, which will be the eleventh hike since early 2022 as it continues its battle against inflation.”

The deVere CEO continues: “The markets have priced-in a rate rise today. What investors will be focusing on is the press conference after the meeting, as they look for any hints about future policy path.

“We expect Chair Jerome Powell will talk tough at this meeting, warning the fight against inflation is not done, that CPI is still way off target, and how this damages the economy.

“He’s right of course. But much of this will be ‘theatre’ in order to intentionally spook the markets.

“The war against inflation is being gradually won, but officials at the Fed will not want markets ‘to get ahead of themselves’, become complacent, and make their job of bringing down the rate of price growth harder.

“They’ll want to indicate that things are getting better, but on the other hand, they don’t want to suggest that they’re done with raising rates yet. It’s a fine line in communication.”

After the latest US CPI came in lighter than economists predicted earlier this month, the deVere CEO is urging the Fed not to raise interest rates past the one that is expected today.

“Investors are increasingly concerned that the Federal Reserve could, with further hikes, overtighten and that could steer the US economy into a major recession. The central bank must maintain the broader picture, not focus on a narrow set of metrics.

“Overdoing the hikes, could not only trigger a US, but a global recession.

“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.

“We’re now starting to see the drag effects on the US economy with households and businesses becoming considerably more prudent.”

The Fed is expected to announce its July policy decision at 2pm ET on Wednesday, followed by a 2.30 pm press conference with Chair Jerome Powell.

Ahead of the meeting and press conference Nigel Green concludes: “We expect Chair Powell will do his best Tough Guy act in order not to let the markets rip higher.”

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 more than 70 offices across the world, over 80,000 clients and $12bn under advisement.

Economics & Fundamentals Opinions

26 Jul

Mid-Week Technical Outlook: Calm Before Fed Storm?

By ForexTime

USD shaky ahead of Fed
USDJPY pressured below 141
SPX500_m preparing to breakout?
NQ100_m still in uptrend
Gold climbs beyond $1970

An air of tension settled over financial markets on Wednesday as investors braced for the pivotal Federal Reserve rate decision.

Global equities struggled for direction amid the growing caution, with European shares and US futures mixed as investors turned to the sidelines. Although the Fed is widely expected to raise interest rates by 25 basis points today, the key question is whether this will be the hike that concludes its aggressive campaign against inflation. Whatever the outcome of today’s policy meeting, it has the potential to rock financial markets.

Here are some technical setups to keep an eye on ahead of the Fed decision:

Dollar shaky and vulnerable

The dollar has weakened against all G10 currencies this morning, with prices testing the 101.10 level. As discussed throughout the week, the pending Fed decision is likely to heavily influence the dollar’s short to medium-term outlook. A strong breakdown below 101.10 may open the doors towards 100.72 and 100.00. Should prices push back above 101.50, the next key level of interest can be found at 102.35.

EURUSD rebound or breakdown?

After rebounding from the 1.1032 region yesterday, the euro has extended gains this morning with bulls eyeing 1.1090. A solid breakout above this point may re-open a path back towards 1.12750. Should prices slip back below 1.1032, bears may target 1.0950.

GBPUSD to resume uptrend?

Wednesday’s strong bullish daily candle could be early signs of GBPUSD bulls returning to the scene. Indeed, prices remain in a bullish trend with the MACD trading to the upside. A move towards 1.3000 could be on the cards if 1.2810 proves to be reliable support. Alternatively, a break below this point may trigger a selloff toward the 50-day Simple Moving Average.

USDJPY pressured below 141.00

USDJPY bears seem to be slowly creeping back into the scene, especially after prices broke through the 141.00 level. Dollar weakness could drag the currency pair towards 138.80 and 138.00, respectively. If prices can push back above 141.00, bulls could challenge 141.90 once again.

SPX500_m breakout alert?

Expect the SPX500_m to be rocked by earnings releases from the largest companies in the world. The index remains bullish on the daily charts with resistance found at 4580. A strong breakout and daily close above this point could trigger a move toward 4640. Sustained weakness below 4580 could see prices test 4500 and 4463.

NQ100_m still in uptrend

Our trade of the week remains in an uptrend on the daily charts. A strong move above 15700 could inspire a move towards 15947. Should prices slip back under 15300, the selloff may take the index towards 14965.

Gold gearing to push higher?

After kicking off the week on a rocky note, gold bulls seem to have their footing with prices trading above the sticky $1960 level. Should this rebound build momentum, this could take the precious metal towards $1985 and $2000. On the other hand, a decline back below $1955 may see prices test $1940 and $1932.

Article 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

25 Jul

The ECB will face tough choices at its next meeting. The People’s Bank of China conducted currency intervention to support the yuan

By JustMarkets

At Monday’s close of the stock market, the Dow Jones Index (US30) closed up by 0.52%, while the S&P 500 Index (US500) added 0.40%. The NASDAQ Technology Index (US100) closed positive by 0.19% on Monday. The Dow Jones Index (US30) extended its daily winning streak to its eleventh consecutive gain, helped by a rally in energy. Energy stocks were supported by a rise in oil prices to an April high amid bets that OPEC supply cuts will tighten market conditions.

The Federal Reserve begins its two-day meeting on Tuesday. A 0.25% rate hike is expected as early as tomorrow, which is already fully factored into the price. Morgan Stanley analysts believe Wednesday’s expected rate hike could likely be the final rate hike, predicting a peak federal funds rate of 5.375% this year.

Equity markets in Europe traded flat yesterday. Germany’s DAX (DE40) increased by 0.08%, France’s CAC 40 (FR40) fell by 0.07%, Spain’s IBEX 35 (ES35) declined by 0.29%, and the UK’s FTSE 100 (UK100) closed 0.19% higher.

The fall in economic indicators across Europe poses a difficult task for the European Central Bank: to make another rate hike in September or to switch to full data dependence. For the ECB, there are now three main options:

The ECB continues to signal that if the core level of inflation is maintained, further tightening is likely. Such signaling is likely to trigger a hawkish market reaction with interest rate expectations rising.
The ECB maintains a fully data-dependent regime, with a willingness to hike but no clear bias towards tightening. In this scenario, the market reaction could be moderately dovish.
The Central Bank assumes that clear progress has been made toward the inflation target, and it is unclear whether further rate hikes are needed. In this scenario, market reaction is likely to be very dovish.

The middle scenario is the closest considered by analysts, which could put pressure on the euro against the dollar in the near term.

Gold’s rally appears to be weakening ahead of this week’s policy meetings between the US Federal Reserve, the European Central Bank, and the Bank of Japan. Gold is highly sensitive to US government bond yields and the dollar index. Hawkish comments from the US Fed will give temporary support to the dollar, which will be negative for precious metals. But in the medium and long term, banks expect the dollar and government bond yields to fall, so gold still has good growth prospects in the higher time frames.

Asian markets were mostly down yesterday. Japan’s Nikkei 225 (JP225) increased by 1.23%, China’s FTSE China A50 (CHA50) fell by 0.54%, Hong Kong’s Hang Seng (HK50) lost 2.13% on the day, and Australia’s S&P/ASX 200 (AU200) was negative by 0.10% on Monday.

Chinese state-owned banks unexpectedly conducted currency intervention to support the yuan against the dollar. The People’s Bank of China (PBoC) set the yuan (CNY) discount rate at 7.1406. It is allowed to trade plus-minus 2% of this rate. This applies to CNY, which is traded on China’s exchanges. There is also an offshore yuan (CNH). Its trading range is unlimited, so significant fluctuations in the exchange rate compared to CNY tend to trigger a reaction from the PBoC.

S&P 500 (F)(US500) 4,554.64 +18.30 (+0.40%)

Dow Jones (US30) 35,411.24 +183.55 (+0.52%)

DAX (DE40) 16,190.95 +13.73 (+0.085%)

FTSE 100 (UK100) 7,678.59 +14.86 (+0.19%)

USD Index 101.40 +0.33 (+0.32%)

Important events for today:

– German Ifo Business Climate (m/m) at 11:00 (GMT+3);
– US CB Consumer Confidence (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

25 Jul

Trade Of The Week: NQ100_m In Focus As Rebalancing Kicks In

By ForexTime

If you have an appetite for volatility, then keep a close eye on the NQ100_m!

This could be a wild week for the index thanks to high-risk events ranging from a special rebalancing which takes effect today, to Big Tech earnings and the major Fed decision.

Despite the technical pullback witnessed last week, the NQ100_m which tracks the underlying Nasdaq 100 index remains a bullish trend.

The low down….

Nasdaq 100 bulls have been on a tear this year, turbocharged by the AI mania that gravitated investors to a handful of big tech names.

Before prices tumbled last Thursday, the index was up almost 45% year-to-date!

Indeed, these gains have been powered by the ‘Magnificent Seven’ known as Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla whose combined weightings represented 55% of the index. In an effort, to limit the overwhelming influence of these tech titans, a special rebalancing will kick into effect before markets open today which will reduce the weightings from 55% to 44%. This development has the potential to spark some fresh action on the Nasdaq 100 as funds worth hundreds of billions of dollars move their allocation to mirror the new weightings.

The week ahead

We could see some more heightened volatility for the NQ100_m due to earnings from Big Tech companies this week.

Earnings from the likes of Microsoft and Alphabet on Tuesday 25th, and Meta on Wednesday 26th will the under the spotlight. When factoring how these Tech companies are within the top 5 holdings and account for roughly 16% of the Nasdaq 100 Index, their results could influence the index. Ultimately, a positive set of earnings may stimulate risk appetite, propelling the NQ100_m higher. Should earnings disappoint, this could drag prices closer to the 15300 support level – resulting in a potential breakdown.

Fed rate decision…

The Federal Reserve is widely expected to raise interest rates by 25 basis points on Wednesday.

However, the question is whether this will be the hike that concludes the central bank’s aggressive hiking cycle. Much attention will be directed to Fed Chair Jerome Powell’s remarks at the press conference for fresh clues on future monetary policy.

It is worth keeping in mind that tech stocks remain highly sensitive to Fed hike expectations because their value is based on earnings projected in the future.

Should the Fed signal that more rate hikes could be on the cards, this could drag the NQ100_m lower.
If the Fed hints it’s done with raising interest rates, this may propel the NQ100_m higher.

Technical forces

Nasdaq bulls remain in a position of power above the 15300 level but the Relative Strength Index is flirting with overbought conditions.

Should 15300 prove to be reliable support, prices may rebound back towards 15700 and 15947, respectively. Beyond this point, the next psychological level can be found at 16000. Alternatively, a breakdown below this level may inspire bears to target 14965 and 14670.

Article by ForexTime

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

Opinions Stock Market News

24 Jul

China’s new economic measures will excite global investors

By George Prior

China’s raft of new measures to bolster its economy strengthens the case for global investors’ continued attraction to the country, says the CEO of one of the world’s largest independent financial advisory, asset management and fintech organizations.

The bullish analysis from Nigel Green of deVere Group comes as China’s economic planning agency announced Monday a series of measures to encourage investment.

Beijing’s series of policies is ahead of a key Politburo meeting this week which will review China’s first half economic performance.

In the 17-point statement, the National Development and Reform Commission vowed to lure more private capital to become involved in the construction of important national projects and major industrial supply chain ventures.

The moves come after last Thursday’s announcement from the People’s Bank of China and the State Administration of Foreign Exchange to confirm that they have modified their cross-border financing rules to allow companies to borrow more from international investors.

Nigel Green says: “Will these measures work? Yes, because they strengthen the case for global investors’ recently renewed enthusiasm for China – which is robust, despite the economic red flags.

“Weaker international demand, which has triggered the drop in exports, comes at a time when the economy is under pressure from a weak property sector and a disappointingly slow Covid rebound after controls were dropped at the start of the year. In addition, youth unemployment is at its highest level on record.

“But despite these challenges, it remains an appealing destination for investors.”

One of the most compelling reasons why investors are attracted to China is its massive market potential.

“With a population of over 1.4 billion people and a growing middle class, China offers a vast consumer base for businesses to tap into. The rising incomes and increasing urbanization have fuelled demand for various products and services, providing ample opportunities for investors across sectors such as technology, healthcare, and consumer goods,” says the deVere CEO.

The People’s Republic also has a proven ability to navigate and adapt to economic challenges. “Despite recent headwinds, including trade tensions and the pandemic, China has shown remarkable resilience.”

The country’s emphasis on research and development, coupled with significant investments in emerging technologies like artificial intelligence, 5G, and biotechnology, has propelled China to the forefront of technological advancements, affirms Nigel Green.

He notes: “Investors recognise this immense potential in these sectors and are eager to capitalise on the nation’s technological prowess, which offers unique opportunities for high returns on investment.”

Investors are also fully aware of China’s economic model which is gradually shifting from export-driven growth to one fuelled by domestic consumption. This transition presents investors with a new set of opportunities as the Chinese population becomes increasingly affluent and consumption-oriented.

Companies that cater to the evolving tastes and preferences of Chinese consumers stand to benefit immensely from this paradigm shift, prompting investors to focus on sectors such as e-commerce, entertainment, and luxury goods.

Nigel Green concludes: “Beijing’s proactive policies, such as stimulus measures and targeted reforms, have effectively supported economic growth and stabilized market conditions in the past and we expect the new measures will do the same. This track record instils confidence in global investors, as they believe that China can effectively address and overcome future obstacles.

“The new policies will further help investors see beyond the short-term and look for the long-term potential in China.”

About:

Economics & Fundamentals Financial News

24 Jul

The Crude Oil Market Relies on Demand

By RoboForex Analytical Department

As the new week in July kicks off, the commodities market is in high spirits. The price of Brent crude oil has surged to 81.00 USD per barrel. The oil sector is responding to rising global tensions, which may have adverse effects on the supply of energy resources. However, demand expectations are stable, and are driving prices upward.

There are growing concerns about the potential displacement of a portion of biofuels by oil and its derivatives, particularly amidst complications with the extension of the “grain deal.” This further supports the upward trend in commodity prices.

According to Baker Hughes data, drilling activity in the US has decreased. The number of oil rigs fell by 7 units to 530, and the number of gas rigs decreased by 2 units to 131.

Technical Analysis of the Brent oil price chart:

On the H4 chart, Brent is currently developing a third wave of growth. Having reached 81.40 USD, a consolidation range is expected to form just below this level. A breakout above this range would likely lead to the continuation of the upward wave, targeting 81.81 USD. Surpassing this level could open the potential for further growth towards 84.00 USD, with the possibility of continuing the upward trend to 85.00 USD. Technically, the MACD indicator confirms this scenario; with its signal line above the zero mark, it is showing a clear upward direction, indicating potential new highs.

On the H1 chart, Brent completed an upward wave to 81.04 USD, followed by a correction to 80.30 USD. After the correction, an upward wave is anticipated to begin targeting 81.80 USD. This target is local. Technically, the Stochastic oscillator also supports this outlook, with its signal line above the 50 mark, indicating a readiness to continue rising towards the 80 mark.

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.

Energy Financial News

24 Jul

In the US, there is a rotation of funds between sectors. Quarterly earnings for the second quarter are not yet in line with forecasts

By JustMarkets

At Friday’s stock market close, the Dow Jones Index (US30) closed at the opening level (+2.11% for the week), while the S&P 500 Index (US500) added 0.03% (+0.61% for the week). The NASDAQ Technology Index (US100) closed positive by 0.20% on Friday (-0.42% for the week). The Nasdaq’s decline in recent days is attributed to the expiration of one-month options and the pending rebalancing of the multi-trillion dollar Nasdaq 100. In recent days, indices have begun to trade multi-directionally, indicating a rotation of funds between sectors. There is now a flow of funds from the technology sector into the banking and healthcare sectors.

American Express’s (AXP) shares fell nearly 4% after the credit card giant missed quarterly earnings expectations and posted a weak full-year profit outlook. Consensus estimates suggest the current reporting season will be a flop. Real GDP growth is expected to deteriorate towards the end of the year.

Equity markets in Europe traded flat on Friday. The German DAX (DE30) decreased by 0.17% (+1.02% for the week), the French CAC 40 (FR40) added 0.65% (+1.62% for the week) on Friday, the Spanish IBEX 35 (ES35) increased by 0.55% (+1.66% for the week), the British FTSE 100 (UK100) closed positive by 0.23% (+3.08% for the week).

The ECB will hold a monetary policy meeting this week. The ECB is expected to raise the rate by 0.25%. But the focus will be on the central bank’s plans for September, and markets are divided on whether there will be another hike or whether the ECB will hit the pause button. ECB President Christine Lagarde is likely to reiterate that future decisions will be based on incoming economic data. Europe’s economic outlook is deteriorating rapidly, with GDP falling in a number of key economies, business activity falling, and manufacturing declining. The only thing holding the economy together is a strong labor market.

Crude oil prices rose for the fourth week in a row. On Friday and Saturday, Russia continued to attack Ukrainian food export businesses in southern Ukraine and escalated tensions after pulling out of an UN-brokered safe sea corridor agreement to transport Ukrainian grain. Moscow has set a condition for the grain deal in the form of lifting some sanctions but is deliberately destroying Ukraine’s port infrastructure, confirming its reputation as a terrorist state.

Asian markets were mostly down last week. Japan’s Nikkei 225 (JP225) fell by 0.87% for the week, China’s FTSE China A50 (CHA50) fell by 0.64%, Hong Kong’s Hang Seng (HK50) ended the week down by 1.29%, and Australia’s S&P/ASX 200 (AU200) ended the week positive by 0.15%.

On Monday, Hong Kong stocks fell amid signs that foreign investors are cutting their bets on China’s biggest companies as Beijing refrains from major stimulus measures amid a deteriorating economy.

Japan’s trade balance data last week showed a trade surplus in June, which could lead to wage growth going forward if demand for Japanese goods remains strong. Wage growth tends to be accompanied by rising prices, meaning inflation will continue to rise slowly, which is crucial for the Bank of Japan before it changes its loose monetary policy. At the same time, Japan’s top financial diplomat suggested on Friday that the central bank may change its approach to monetary stimulus at its policy meeting because of “signs of change” in corporate behavior regarding wage growth and price increases.

New Zealand recorded a small trade surplus in June, mainly due to lower volumes and values of imported gasoline and diesel. Imports and exports totaled about $16.3 billion, with exports exceeding imports by only $8.8 million. These figures are better than Westpac’s forecast of a $450 million monthly deficit. However, they do not change the overall picture of an alarming annual deficit. On a seasonally adjusted basis, the country’s trade deficit for the second quarter totaled $2.3 billion.

S&P 500 (F)(US500) 4,536.34 +1.47 (+0.032%)

Dow Jones (US30) 35,227.69 +2.51 (+0.01%)

DAX (DE40) 16,177.22 −27.00 (−0.17%)

FTSE 100 (UK100) 7,663.73 +17.68 (+0.23%)

USD Index 101.09 +0.21 (+0.20%)

Important events for today:

– New Zealand Trade Balance (q/q) at 01:45 (GMT+3);
– Australia Manufacturing PMI (m/m) at 02:00 (GMT+3);
– Australia Services PMI (m/m) at 02:00 (GMT+3);
– Japan Manufacturing PMI (m/m) at 03:30 (GMT+3);
– Japan Services PMI (m/m) at 03:30 (GMT+3);
– Singapore Consumer Price Index (m/m) at 08:00 (GMT+3);
– Germany Manufacturing PMI (m/m) at 10:30 (GMT+3);
– Germany Services PMI (m/m) at 10:30 (GMT+3);
– Eurozone Manufacturing PMI (m/m) at 11:00 (GMT+3);
– Eurozone Services PMI (m/m) at 11:00 (GMT+3);
– UK Manufacturing PMI (m/m) at 11:30 (GMT+3);
– UK Services PMI (m/m) at 11:30 (GMT+3);
– US Manufacturing PMI (m/m) at 16:45 (GMT+3);
– US Services PMI (m/m) at 16:45 (GMT+3).

By JustMarkets

Economics & Fundamentals Financial News

23 Jul

Euro and Japanese Yen Speculator Bets Jump this week

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 July 18th 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 Euro & Japanese Yen

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

Leading the gains for the currency markets was the EuroFX (38,670 contracts) with the Japanese Yen (26,943 contracts), the British Pound (5,666 contracts), the Brazilian Real (735 contracts) and Bitcoin (694 contracts) also showing positive weeks.

The currencies seeing declines in speculator bets on the week were the Australian Dollar (-5,317 contracts), the Canadian Dollar (-3,923 contracts), the New Zealand Dollar (-2,375 contracts), the Swiss Franc (-2,304 contracts), the Mexican Peso (-1,674 contracts) and the US Dollar Index (-944 contracts) also registering lower bets on the week.

Euro and Japanese Yen Speculator Bets Jump this week

Highlighting the COT currency’s data is the strength of this week’s moves in the speculator’s positioning of the Euro and Japanese Yen.

Large speculative Euro positions jumped this week by over +38,000 contracts and reversed a recent decline for the Euro positions in seven out of the previous eight weeks. This gain in bullish bets has pushed the overall net speculator position to the most bullish level of the past nine weeks at a total of +178,832 contracts.

The Euro currency’s strength has been on display over the past few months as the EURUSD exchange rate touched a one-year high this week at over the 1.1300 level. The EURUSD did close the week lower after hitting the one-year high but is now quite a ways off the 2022 low of 0.9508 that was touched in September.

The large speculative yen positions also surged this week by over +26,000 net contracts and gained for the second week in a row. The yen speculator positioning has been quite the opposite of the Euro as the Bank of Japan has maintained a policy of no interest rate increases which has prompted speculators to have large bearish positions in the yen. The speculator position on July 3rd marked the most bearish level since January of 2018 at a total of -117,920 contracts.

The yen positions in the past two weeks have improved though and this week’s gain brings the current bearish position (at -90,239 contracts) under the -100,000 contract threshold for the first time since May.

The yen’s exchange rate versus the US Dollar remains historically weak and in a downtrend in our trend model. The USDJPY exchange rate rose back over the 140.00 threshold this week (US Dollar strength/Japanese Yen weakness) after dipping below that level last week.

This upcoming week will be a potentially volatile week in currencies as the Bank of Japan and the US Federal Reserve will have central bank meetings and announce their respective policy outlooks.

Data Snapshot of Forex Market Traders | Columns Legend

Jul-18-2023	OI	OI-Index	Spec-Net	Spec-Index	Com-Net	COM-Index	Smalls-Net	Smalls-Index
USD Index	41,045	37	11,067	43	-11,617	57	550	23
EUR	783,132	80	178,832	87	-229,343	13	50,511	60
GBP	265,766	77	63,729	100	-81,606	0	17,877	93
JPY	230,932	63	-90,239	16	98,195	84	-7,956	37
CHF	43,213	47	-10,211	28	5,927	55	4,284	72
CAD	146,171	23	521	55	-12,991	47	12,470	50
AUD	148,592	35	-50,401	38	51,045	57	-644	51
NZD	39,402	32	-3,626	44	938	49	2,688	82
MXN	238,006	51	94,492	97	-98,239	3	3,747	35
RUB	20,930	4	7,543	31	-7,150	69	-393	24
BRL	48,146	37	33,933	79	-32,196	25	-1,737	30
Bitcoin	15,455	73	-1,161	57	196	0	965	35

Strength Scores led by British Pound & Mexican Peso

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 British Pound (100 percent) and the Mexican Peso (97 percent) lead the currency markets this week. The EuroFX (87 percent), Brazilian Real (79 percent) and the Bitcoin (57 percent) come in as the next highest in the weekly strength scores.

On the downside, the Japanese Yen (16 percent) and the Swiss Franc (28 percent) come in at the lowest strength levels currently. The next lowest strength scores are the Australian Dollar (38 percent) and the US Dollar Index (43 percent).

Strength Statistics:
US Dollar Index (43.4 percent) vs US Dollar Index previous week (45.0 percent)
EuroFX (87.3 percent) vs EuroFX previous week (72.4 percent)
British Pound Sterling (100.0 percent) vs British Pound Sterling previous week (96.1 percent)
Japanese Yen (16.4 percent) vs Japanese Yen previous week (0.4 percent)
Swiss Franc (27.6 percent) vs Swiss Franc previous week (33.7 percent)
Canadian Dollar (55.0 percent) vs Canadian Dollar previous week (58.7 percent)
Australian Dollar (38.1 percent) vs Australian Dollar previous week (43.0 percent)
New Zealand Dollar (43.8 percent) vs New Zealand Dollar previous week (50.2 percent)
Mexican Peso (96.8 percent) vs Mexican Peso previous week (97.8 percent)
Brazilian Real (78.9 percent) vs Brazilian Real previous week (78.0 percent)
Bitcoin (56.7 percent) vs Bitcoin previous week (44.6 percent)

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

COT Strength Score Trends (or move index, calculates the 6-week changes in strength scores) showed that the British Pound (36 percent) and the Canadian Dollar (36 percent) lead the past six weeks trends for the currencies. The Brazilian Real (10 percent), the Japanese Yen (9 percent) and the EuroFX (8 percent) are the next highest positive movers in the latest trends data.

Bitcoin (-34 percent) leads the downside trend scores currently with the Swiss Franc (-24 percent), New Zealand Dollar (-8 percent) and the US Dollar Index (-2 percent) following next with lower trend scores.

Strength Trend Statistics:
US Dollar Index (-1.9 percent) vs US Dollar Index previous week (-1.3 percent)
EuroFX (7.9 percent) vs EuroFX previous week (-9.9 percent)
British Pound Sterling (35.6 percent) vs British Pound Sterling previous week (31.1 percent)
Japanese Yen (8.7 percent) vs Japanese Yen previous week (-12.5 percent)
Swiss Franc (-23.5 percent) vs Swiss Franc previous week (-19.8 percent)
Canadian Dollar (36.2 percent) vs Canadian Dollar previous week (32.0 percent)
Australian Dollar (5.6 percent) vs Australian Dollar previous week (-0.9 percent)
New Zealand Dollar (-7.9 percent) vs New Zealand Dollar previous week (-3.0 percent)
Mexican Peso (7.8 percent) vs Mexican Peso previous week (11.1 percent)
Brazilian Real (9.9 percent) vs Brazilian Real previous week (2.4 percent)
Bitcoin (-33.7 percent) vs Bitcoin previous week (-35.6 percent)

Individual COT Forex Markets:

US Dollar Index Futures:

The US Dollar Index large speculator standing this week came in at a net position of 11,067 contracts in the data reported through Tuesday. This was a weekly reduction of -944 contracts from the previous week which had a total of 12,011 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 43.4 percent. The commercials are Bullish with a score of 57.3 percent and the small traders (not shown in chart) are Bearish with a score of 22.5 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.

US DOLLAR INDEX Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	66.8	19.5	10.2
– Percent of Open Interest Shorts:	39.8	47.8	8.9
– Net Position:	11,067	-11,617	550
– Gross Longs:	27,410	7,994	4,193
– Gross Shorts:	16,343	19,611	3,643
– Long to Short Ratio:	1.7 to 1	0.4 to 1	1.2 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	43.4	57.3	22.5
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-1.9	5.6	-26.2

Euro Currency Futures:

The Euro Currency large speculator standing this week came in at a net position of 178,832 contracts in the data reported through Tuesday. This was a weekly boost of 38,670 contracts from the previous week which had a total of 140,162 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 87.3 percent. The commercials are Bearish-Extreme with a score of 13.0 percent and the small traders (not shown in chart) are Bullish with a score of 59.6 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.

EURO Currency Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	33.8	51.9	12.4
– Percent of Open Interest Shorts:	10.9	81.2	5.9
– Net Position:	178,832	-229,343	50,511
– Gross Longs:	264,514	406,328	97,050
– Gross Shorts:	85,682	635,671	46,539
– Long to Short Ratio:	3.1 to 1	0.6 to 1	2.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	87.3	13.0	59.6
– Strength Index Reading (3 Year Range):	Bullish-Extreme	Bearish-Extreme	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	7.9	-8.6	8.0

British Pound Sterling Futures:

The British Pound Sterling large speculator standing this week came in at a net position of 63,729 contracts in the data reported through Tuesday. This was a weekly rise of 5,666 contracts from the previous week which had a total of 58,063 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 Bullish-Extreme with a score of 93.1 percent.

Price Trend-Following Model: Uptrend

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

BRITISH POUND Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	50.9	28.7	15.0
– Percent of Open Interest Shorts:	26.9	59.4	8.2
– Net Position:	63,729	-81,606	17,877
– Gross Longs:	135,269	76,229	39,762
– Gross Shorts:	71,540	157,835	21,885
– Long to Short Ratio:	1.9 to 1	0.5 to 1	1.8 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	100.0	0.0	93.1
– Strength Index Reading (3 Year Range):	Bullish-Extreme	Bearish-Extreme	Bullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	35.6	-37.8	31.9

Japanese Yen Futures:

The Japanese Yen large speculator standing this week came in at a net position of -90,239 contracts in the data reported through Tuesday. This was a weekly advance of 26,943 contracts from the previous week which had a total of -117,182 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 16.4 percent. The commercials are Bullish-Extreme with a score of 83.6 percent and the small traders (not shown in chart) are Bearish with a score of 37.3 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:	12.9	73.8	12.2
– Percent of Open Interest Shorts:	52.0	31.3	15.6
– Net Position:	-90,239	98,195	-7,956
– Gross Longs:	29,776	170,491	28,148
– Gross Shorts:	120,015	72,296	36,104
– Long to Short Ratio:	0.2 to 1	2.4 to 1	0.8 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	16.4	83.6	37.3
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	8.7	-7.6	2.0

Swiss Franc Futures:

The Swiss Franc large speculator standing this week came in at a net position of -10,211 contracts in the data reported through Tuesday. This was a weekly fall of -2,304 contracts from the previous week which had a total of -7,907 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 27.6 percent. The commercials are Bullish with a score of 54.8 percent and the small traders (not shown in chart) are Bullish with a score of 72.0 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.

SWISS FRANC Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	15.7	42.1	42.0
– Percent of Open Interest Shorts:	39.3	28.4	32.1
– Net Position:	-10,211	5,927	4,284
– Gross Longs:	6,772	18,183	18,158
– Gross Shorts:	16,983	12,256	13,874
– Long to Short Ratio:	0.4 to 1	1.5 to 1	1.3 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	27.6	54.8	72.0
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-23.5	-1.8	33.9

Canadian Dollar Futures:

The Canadian Dollar large speculator standing this week came in at a net position of 521 contracts in the data reported through Tuesday. This was a weekly decline of -3,923 contracts from the previous week which had a total of 4,444 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 55.0 percent. The commercials are Bearish with a score of 47.3 percent and the small traders (not shown in chart) are Bullish with a score of 50.5 percent.

Price Trend-Following Model: Uptrend

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

CANADIAN DOLLAR Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	23.2	50.5	24.6
– Percent of Open Interest Shorts:	22.8	59.4	16.0
– Net Position:	521	-12,991	12,470
– Gross Longs:	33,877	73,833	35,907
– Gross Shorts:	33,356	86,824	23,437
– Long to Short Ratio:	1.0 to 1	0.9 to 1	1.5 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	55.0	47.3	50.5
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	36.2	-35.0	28.0

Australian Dollar Futures:

The Australian Dollar large speculator standing this week came in at a net position of -50,401 contracts in the data reported through Tuesday. This was a weekly reduction of -5,317 contracts from the previous week which had a total of -45,084 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 38.1 percent. The commercials are Bullish with a score of 57.0 percent and the small traders (not shown in chart) are Bullish with a score of 50.9 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.

AUSTRALIAN DOLLAR Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	25.7	57.2	14.5
– Percent of Open Interest Shorts:	59.7	22.8	14.9
– Net Position:	-50,401	51,045	-644
– Gross Longs:	38,252	84,937	21,539
– Gross Shorts:	88,653	33,892	22,183
– Long to Short Ratio:	0.4 to 1	2.5 to 1	1.0 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	38.1	57.0	50.9
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	5.6	-12.3	25.3

New Zealand Dollar Futures:

The New Zealand Dollar large speculator standing this week came in at a net position of -3,626 contracts in the data reported through Tuesday. This was a weekly reduction of -2,375 contracts from the previous week which had a total of -1,251 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 43.8 percent. The commercials are Bearish with a score of 48.7 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 81.9 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 Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	33.5	52.4	13.0
– Percent of Open Interest Shorts:	42.7	50.0	6.2
– Net Position:	-3,626	938	2,688
– Gross Longs:	13,193	20,654	5,117
– Gross Shorts:	16,819	19,716	2,429
– Long to Short Ratio:	0.8 to 1	1.0 to 1	2.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	43.8	48.7	81.9
– Strength Index Reading (3 Year Range):	Bearish	Bearish	Bullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-7.9	-4.5	57.6

Mexican Peso Futures:

The Mexican Peso large speculator standing this week came in at a net position of 94,492 contracts in the data reported through Tuesday. This was a weekly lowering of -1,674 contracts from the previous week which had a total of 96,166 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 96.8 percent. The commercials are Bearish-Extreme with a score of 2.9 percent and the small traders (not shown in chart) are Bearish with a score of 35.1 percent.

Price Trend-Following Model: Uptrend

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

MEXICAN PESO Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	51.6	44.0	3.6
– Percent of Open Interest Shorts:	11.9	85.2	2.1
– Net Position:	94,492	-98,239	3,747
– Gross Longs:	122,811	104,617	8,638
– Gross Shorts:	28,319	202,856	4,891
– Long to Short Ratio:	4.3 to 1	0.5 to 1	1.8 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	96.8	2.9	35.1
– Strength Index Reading (3 Year Range):	Bullish-Extreme	Bearish-Extreme	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	7.8	-6.2	-15.1

Brazilian Real Futures:

The Brazilian Real large speculator standing this week came in at a net position of 33,933 contracts in the data reported through Tuesday. This was a weekly lift of 735 contracts from the previous week which had a total of 33,198 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 78.9 percent. The commercials are Bearish with a score of 25.1 percent and the small traders (not shown in chart) are Bearish with a score of 30.2 percent.

Price Trend-Following Model: Uptrend

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

BRAZIL REAL Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	76.3	14.1	9.2
– Percent of Open Interest Shorts:	5.8	81.0	12.8
– Net Position:	33,933	-32,196	-1,737
– Gross Longs:	36,730	6,793	4,429
– Gross Shorts:	2,797	38,989	6,166
– Long to Short Ratio:	13.1 to 1	0.2 to 1	0.7 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	78.9	25.1	30.2
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	9.9	-8.0	-10.2

Bitcoin Futures:

The Bitcoin large speculator standing this week came in at a net position of -1,161 contracts in the data reported through Tuesday. This was a weekly rise of 694 contracts from the previous week which had a total of -1,855 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 56.7 percent. The commercials are Bullish with a score of 63.9 percent and the small traders (not shown in chart) are Bearish with a score of 34.9 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:	76.6	4.7	10.7
– Percent of Open Interest Shorts:	84.2	3.4	4.5
– Net Position:	-1,161	196	965
– Gross Longs:	11,846	722	1,657
– Gross Shorts:	13,007	526	692
– Long to Short Ratio:	0.9 to 1	1.4 to 1	2.4 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	56.7	63.9	34.9
– Strength Index Reading (3 Year Range):	Bullish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-33.7	53.6	12.2

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

23 Jul

Speculator Extremes: GBP, Cocoa, 2-Year & Palladium lead Bullish & Bearish Positions

By InvestMacro

The latest update for the weekly Commitment of Traders (COT) report was released by the Commodity Futures Trading Commission (CFTC) on Friday for data ending on July 18th.

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:

British Pound

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

The six-week trend for the percent strength score totaled 35.6 this week. The overall net speculator position was a total of 63,729 net contracts this week with a change of 5,666 contract in the weekly speculator bets.

Cocoa Futures

The Cocoa Futures speculator position comes next in the extreme standings this week. The Cocoa Futures speculator level is now at a 98.3 percent score of its 3-year range.

The six-week trend for the percent strength score was 4.9 this week. The speculator position registered 76,488 net contracts this week with a weekly change of 6,373 contracts in 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.

Mexican Peso

The Mexican Peso speculator position comes in third this week in the extreme standings. The Mexican Peso speculator level resides at a 96.8 percent score of its 3-year range.

The six-week trend for the speculator strength score came in at 7.8 this week. The overall speculator position was 94,492 net contracts this week with a change of -1,674 contracts in the weekly speculator bets.

Live Cattle

The Live Cattle speculator position comes up number four in the extreme standings this week. The Live Cattle speculator level is at a 92.0 percent score of its 3-year range.

The six-week trend for the speculator strength score totaled a change of -0.8 this week. The overall speculator position was 104,844 net contracts this week with a change of -3,657 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 90.1 percent score of its 3-year range. The six-week trend for the speculator strength score was 12.8 this week.

The speculator position was -40,289 net contracts this week with a change of 10,444 contracts in the weekly speculator bets.

This Week’s Most Bearish Speculator Positions:

2-Year Bond

The 2-Year Bond speculator position comes in as the most bearish extreme standing this week. The 2-Year Bond speculator level is at a 0.0 percent score of its 3-year range.

The six-week trend for the speculator strength score was -13.2 this week. The overall speculator position was -1,119,380 net contracts this week with a change of -47,680 contracts in the speculator bets.

1-Month Secured Overnight Financing Rate

The 1-Month Secured Overnight Financing Rate speculator position comes in next for the most bearish extreme standing on the week. The 1-Month Secured Overnight Financing Rate speculator level is at a 0.0 percent score of its 3-year range.

The six-week trend for the speculator strength score was -56.1 this week. The speculator position was -237,629 net contracts this week with a change of -44,936 contracts in the weekly speculator bets.

Palladium

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

The six-week trend for the speculator strength score was -14.5 this week. The overall speculator position was -8,350 net contracts this week with a change of -78 contracts in the speculator bets.

5-Year Bond

The 5-Year Bond speculator position comes in as this week’s fourth most bearish extreme standing. The 5-Year Bond speculator level is at a 0.0 percent score of its 3-year range.

The six-week trend for the speculator strength score was -9.5 this week. The speculator position was -1,145,489 net contracts this week with a change of -89,405 contracts in the weekly speculator bets.

Ultra U.S. Treasury Bonds

Finally, the Ultra U.S. Treasury Bonds speculator position comes in as the fifth most bearish extreme standing for this week. The Ultra U.S. Treasury Bonds speculator level is at a 4.6 percent score of its 3-year range.

The six-week trend for the speculator strength score was -13.4 this week. The speculator position was -439,397 net contracts this week with a change of -6,485 contracts in the weekly speculator bets.

Article By InvestMacro – Receive our weekly COT Newsletter

COT Updates Forex and Currency News Opinions

23 Jul

COT Metals Charts: Weekly Speculator Changes led by Gold & Silver

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 July 18th 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 & Silver

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

Leading the gains for the metals was Gold (27,594 contracts) with Silver (23,570 contracts), Platinum (7,949 contracts) and Copper (7,607 contracts) also having positive weeks.

The markets with declines in speculator bets for the week were Palladium (-78 contracts) and Steel (-169 contracts).

Data Snapshot of Commodity Market Traders | Columns Legend

Jul-18-2023	OI	OI-Index	Spec-Net	Spec-Index	Com-Net	COM-Index	Smalls-Net	Smalls-Index
Gold	482,104	28	193,348	62	-213,715	41	20,367	31
Silver	146,863	36	43,862	81	-55,983	26	12,121	34
Copper	216,862	56	-3,550	28	-1,054	71	4,604	48
Palladium	16,017	100	-8,350	0	8,837	100	-487	12
Platinum	65,834	54	15,736	52	-19,674	53	3,938	21

Strength Scores led by Silver & Steel

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 Silver (81 percent) and Steel (72 percent) lead the metals markets this week. comes in as the next highest in the weekly strength scores.

On the downside, Palladium (0 percent) comes in at the lowest strength level currently and is in Extreme-Bearish territory (below 20 percent).

Strength Statistics:
Gold (62.2 percent) vs Gold previous week (50.0 percent)
Silver (80.8 percent) vs Silver previous week (47.2 percent)
Copper (27.8 percent) vs Copper previous week (21.2 percent)
Platinum (51.9 percent) vs Platinum previous week (33.6 percent)
Palladium (0.0 percent) vs Palladium previous week (0.6 percent)
Steel (72.1 percent) vs Palladium previous week (72.6 percent)

Silver & Copper top the 6-Week Strength Trends

COT Strength Score Trends (or move index, calculates the 6-week changes in strength scores) showed that Silver (32 percent) and Copper (19 percent) lead the past six weeks trends for metals. is the next highest positive mover in the latest trends data.

Platinum (-20 percent) and Palladium (-14 percent) lead the downside trend scores currently.

Move Statistics:
Gold (7.8 percent) vs Gold previous week (-1.6 percent)
Silver (31.9 percent) vs Silver previous week (-1.2 percent)
Copper (19.4 percent) vs Copper previous week (21.2 percent)
Platinum (-20.5 percent) vs Platinum previous week (-36.0 percent)
Palladium (-14.5 percent) vs Palladium previous week (-18.4 percent)
Steel (6.8 percent) vs Steel previous week (14.8 percent)

Individual Markets:

Gold Comex Futures:

The Gold Comex Futures large speculator standing this week totaled a net position of 193,348 contracts in the data reported through Tuesday. This was a weekly rise of 27,594 contracts from the previous week which had a total of 165,754 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 62.2 percent. The commercials are Bearish with a score of 41.4 percent and the small traders (not shown in chart) are Bearish with a score of 31.0 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: New Sell – Short Position.

Gold Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	54.7	24.0	9.5
– Percent of Open Interest Shorts:	14.6	68.3	5.3
– Net Position:	193,348	-213,715	20,367
– Gross Longs:	263,740	115,498	45,784
– Gross Shorts:	70,392	329,213	25,417
– Long to Short Ratio:	3.7 to 1	0.4 to 1	1.8 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	62.2	41.4	31.0
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	7.8	-6.0	-5.5

Silver Comex Futures:

The Silver Comex Futures large speculator standing this week totaled a net position of 43,862 contracts in the data reported through Tuesday. This was a weekly increase of 23,570 contracts from the previous week which had a total of 20,292 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 80.8 percent. The commercials are Bearish with a score of 26.1 percent and the small traders (not shown in chart) are Bearish with a score of 33.7 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.

Silver Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	52.0	26.4	16.7
– Percent of Open Interest Shorts:	22.2	64.5	8.5
– Net Position:	43,862	-55,983	12,121
– Gross Longs:	76,420	38,710	24,540
– Gross Shorts:	32,558	94,693	12,419
– Long to Short Ratio:	2.3 to 1	0.4 to 1	2.0 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	80.8	26.1	33.7
– Strength Index Reading (3 Year Range):	Bullish-Extreme	Bearish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	31.9	-26.5	-2.6

Copper Grade #1 Futures:

The Copper Grade #1 Futures large speculator standing this week totaled a net position of -3,550 contracts in the data reported through Tuesday. This was a weekly rise of 7,607 contracts from the previous week which had a total of -11,157 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 27.8 percent. The commercials are Bullish with a score of 70.8 percent and the small traders (not shown in chart) are Bearish with a score of 47.5 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.

Copper Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	31.0	41.3	8.2
– Percent of Open Interest Shorts:	32.7	41.8	6.0
– Net Position:	-3,550	-1,054	4,604
– Gross Longs:	67,321	89,488	17,684
– Gross Shorts:	70,871	90,542	13,080
– Long to Short Ratio:	0.9 to 1	1.0 to 1	1.4 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	27.8	70.8	47.5
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	19.4	-21.2	20.6

Platinum Futures:

The Platinum Futures large speculator standing this week totaled a net position of 15,736 contracts in the data reported through Tuesday. This was a weekly rise of 7,949 contracts from the previous week which had a total of 7,787 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 51.9 percent. The commercials are Bullish with a score of 52.8 percent and the small traders (not shown in chart) are Bearish with a score of 20.9 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.

Platinum Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	58.1	26.2	10.9
– Percent of Open Interest Shorts:	34.2	56.1	4.9
– Net Position:	15,736	-19,674	3,938
– Gross Longs:	38,256	17,254	7,148
– Gross Shorts:	22,520	36,928	3,210
– Long to Short Ratio:	1.7 to 1	0.5 to 1	2.2 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	51.9	52.8	20.9
– Strength Index Reading (3 Year Range):	Bullish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-20.5	18.8	-2.6

Palladium Futures:

The Palladium Futures large speculator standing this week totaled a net position of -8,350 contracts in the data reported through Tuesday. This was a weekly fall of -78 contracts from the previous week which had a total of -8,272 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 0.0 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 12.4 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:	23.3	61.4	8.7
– Percent of Open Interest Shorts:	75.5	6.3	11.8
– Net Position:	-8,350	8,837	-487
– Gross Longs:	3,738	9,840	1,398
– Gross Shorts:	12,088	1,003	1,885
– Long to Short Ratio:	0.3 to 1	9.8 to 1	0.7 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	0.0	100.0	12.4
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-14.5	12.4	6.2

Steel Futures Futures:

The Steel Futures large speculator standing this week totaled a net position of -370 contracts in the data reported through Tuesday. This was a weekly reduction of -169 contracts from the previous week which had a total of -201 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 72.1 percent. The commercials are Bearish with a score of 27.5 percent and the small traders (not shown in chart) are Bearish with a score of 47.3 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.

Steel Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	18.0	74.2	1.7
– Percent of Open Interest Shorts:	19.5	73.6	0.8
– Net Position:	-370	160	210
– Gross Longs:	4,355	17,966	411
– Gross Shorts:	4,725	17,806	201
– Long to Short Ratio:	0.9 to 1	1.0 to 1	2.0 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	72.1	27.5	47.3
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	6.8	-7.1	12.5

Article By InvestMacro – Receive our weekly COT Newsletter

COT Updates Metals Opinions

Risk Disclosure: Foreign Currency trading and trading on margin carries a high level of risk and can result in loss of part or all of your investment. Due to the level of risk and market volatility, Foreign Currency trading may not be suitable for all investors and you should not invest money you cannot afford to lose. Before deciding to invest in the foreign currency exchange market you should carefully consider your investment objectives, level of experience, and risk appetite. You should be aware of all the risks associated with foreign currency exchange trading, and seek advice from an independent financial advisor should you have any doubts.

All information and opinions on this website are for general informational purposes only and do not constitute investment advice.