Saturday September 2, 2017 - 11:00:35 GMT
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Commitment Of Traders Report for 29 August 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 continue to hold basically flat in futures trade. The heavy blue line (once a week spots) provides a useful perspective. It shows that EURUSD pair had been topped out recently. Its uptrend late Friday turned up again with a spike above the 1.2000 line, but it did hold. The focus in the week aheadwill be on the Thursday ECB meeting. As a developing 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 remains short. These shorts have been growing for the past months so as the GBPUSD has been unable to firmly form a floor above the GBPUSD 1.3000 line. This unit is more sensitive than most to its economic data. This characteristic makes it more attractive to those of us who rely on active markets. 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.
Long USDJPY positions are winding dow. USDJPY and the EURUSD have started to trade in tandem again against the USD. The USDJPY pair tends to been heavily manipulated by the Bank of Japan. It typically tries to keep the currency depressed to promote exports. Whenever the USDJPY starts to slide, expect to ecounter hidden BOJ USDJPY support. The USDJPY correlates positively with the yield on the U.S. 10-yr note.
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