Saturday June 17, 2017 - 11:10:53 GMT
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Commitment Of Traders Report for 13 June 2017 Data Register To Test Your Amazing Trader
Forex trading is all about stops. The Commitment of Traders Report (COT) is an imperfect, but useful, "sampling" of market positioning. I would prefer more frequent and precise readings, but we have to live with what we get. The data work for the purpose of getting an idea if traders are positioned long or short and if they in big or small.
EURUSD positions remain decisively long. In the latest week, upside EURUSD momentum has continued to wane as the pair atruggled and failed to establish itself above the psychological 1.1200. By Friday's close it was just below the now neutral 1.1200 line. As a reserve currency, keep in mind EUR positions are not just against the USD. EUR crosses vs. the JPY and GBP are critical. The European economy is improving and that should remain a EUR positive.
Following the U.K. election shocker, the GBP remains in a two-way market. The weak May government will keep the GBP at risk to periodic bouts of weakness. The unit is highly sensitive to U.K. economic data, and that can be helpful to those of us who rely on active markets. U.K. data tend to be released in the mid-month period. As for the Commitment of Traders data, markets are now maintaining modest GBPUSD shorts. GBPUSD 1.3000 remains a key psychological target. It is the demarkation line between strength or weakness. Keep an eye on the EURGBP cross as a barometer of flows in and out of the EUR. These flows often directly impact both units against the USD.
The JPY remains at risk to a soft economy and BOJ monetary stimulus. Furthermore, the USDJPY pair is heavily manipulated by the Bank of Japan, which usually tries to keep its currency relatively depressed to stimulate exports. Whenever the USDJPY starts to slide, exprct to to see the BOJ support the pair. USDJPY tends to correlate positively with the yield on the U.S. 10-yr note and equity prices. COT positions remain fairly long the USDJPY.
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