Saturday July 8, 2017 - 11:39:31 GMT
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Amazing Trader And COT Positions For July 5, 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 net long positions continued to build early in the past week and likely continued to gradually increase subsequently. The 1.1400 line has become a barrier and must be established as support to renew the upside momentum. 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.
Net GBPUSD positions remained short and steady through the COT data period. BOE Governor Carney recently has taken a more hawkish monetary policy posture. This unit is more highly sensitive than many currencies to its economic data, and that is helpful to those of us who rely on active markets. GBPUSD 1.3000 remains a psychological barrier that mist be breached. 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 USDJPY pair has always been heavily manipulated by the Bank of Japan. It usually tries to keep its currency depressed to stimulate exports. Whenever the USDJPY starts to slide, expect to to see BOJ USDJPY support. This support typically is covert. Keep in mind also, the USDJPY correlates positively with the yield on the U.S. 10-yr note. With U.S. rates moving higher, USDJPY longs (JPY futures shorts) have INCREASED. The Bank of Japan is nowhere near tightening its monetary policy.
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