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British Pound Bullish Signal from COT Report

The percentage of commercial traders that are long the British Pound is high.  This is a bullish signal.

US Dollar Index: The 13 week COT index has bounced from 0, which is 0.  Tops tend to occur when the COT index moves off of 100 and bottoms when the COT index moves off of 0.  However, the percentage of commercials that are long is low.  Commercials are usually heavy buyers near bottoms and heavy sellers near tops.  The signals are mixed.

 

Implications: neutral

EUR: The COT index has dropped from 100, which is bearish.  The percentage of commercials that are long is near 50%, which tells us nothing.  A weak bullish signal is given from the current numbers.        

 

Implications: bullish

GBP: The COT index for the British Pound has also dropped from 0 but the percentage of commercial traders that are long is high (close to 80%) and the composite COT is increasing from historically low levels.  The weight of evidence favors bulls.

                  

Implications: bullish

CHF: The 13 week index has rolled over and the percentage of commercial traders that are long has fallen significantly in recent weeks.  Both indicators suggest CHF weakness (USDCHF strength).

 

Implications: bearish (USDCHF bullish)

JPY:  The COT index recently dropped from 100, the percentage of commercial traders that are long is near an all-time low and the composite COT is close to the level that was reached March (significant USDJPY bottom).  All the indicators are cautiously bearish for Yen (bullish USDJPY).

 

Implications: bearish (bullish USDJPY)

CAD:  CAD positoning is neutral.  The Composite COT is near 0 and the percentage of commercials that are long is near 50%.

                      

Implications: neutral

AUD:  The 13 week COT index has rolled over from 100.  However, the 52 week index (not shown) is at 33 and increasing.  The percentage of commercials that are long is falling but not low historically.  The weight of evidence favors bulls.

 

Implications: bullish

NZD:  The NZD 13 week index has turned from 100 but the 52 week index is at 37 and increasing.  Speculators were recently net short the largest amount of NZD on record (the record only goes back a few years though).  Favor the long side

 

Implications: bullish

 

Jamie Saettele writes Forex Technicals: The Day Ahead, Monday-Thursday (published at 6 pm EST), Daily Technicals every weekday morning (9 am EST), COT analysis (published Monday mornings), and analysis of currency crosses throughout the week.  He is also the author of Sentiment in the Forex Market.

                               

Contact at jsaettele@dailyfx.com