Forex Source:

COT Currency Report

W/c 13 June 2020
How To Use The COT Report Latest CFTC
The Commitment Of Traders (COT) is a weekly report that is released Update:
every Friday by the Commodity Futures Trading Commission (CFTC) and
reflects the aggregate holdings of different participants in the U.S. futures
market as of Tuesday the same week.

The report is a tool for showing us how the market is positioned for a particular
currency.

Knowing whether the market has an extreme long, short or neutral position on a
currency is a great add-on to your analysis.

Apart from showing us the extreme long and short positioning, the COT data is
also useful for evaluating how the market increases and decreases their
short and long positioning.

This can give us valuable insights into the current sentiment, and
possible sentiment shifts on a particular currency.

The most important thing to remember about COT data is that it should never
replace fundamental and sentiment analysis.

This info can give us clues on how sentiment is developing and changing, but it
should never be used as a trade signal on its own and only be incorporated as an
additional layer of analysis. This report reflects the COT
data updated until 9 June 2020
* All COT net positions which fall within a range of between +1000 and
-1000 contracts have been deemed as Neutral

Forex Source: COT Currency Report

Latest CFTC Update:

Forex Source: COT Currency Report

Latest CFTC Update:

Forex Source: COT Currency Report

Latest CFTC Analysis
Overall:
The recent CFTC data updated until 9 June should be no surprise with the monster
risk rallies we saw across the board. Big out flows from the safe haven currencies
and big inflows into the high betas.
AUD, NZD & CAD:
High betas keeps on trimming those net short positions alongside more and more
market participants getting out of equity shorts as well. After second wave fears hit
the markets this week we saw some big risk off moves at the end of the week.
If second wave fears dominate the headlines it could lead to further pull back in risk
assets after they hit significant resistance areas across the board. Keep in mind
however, unless a second wave leads to total economic shutdown, the downside
should be more limited than recent upside and value buyers will be looking to get
back into the game at some point.
JPY & CHF & USD:
Big outflows in the safe havens with the CFTC data updated until 9 June. This data
does not include this week's big risk off moves which benefited safe havens across
the board.
With the Fed's commitment to keeping the gravy train running, that alongside
reflation hopes should be a med-term negative factor for the USD, so keep that in
mind once markets start to fade and discount the second-wave fears.
GBP:
The Pound had some fun in the sun with broad-based Dollar weakness. But on
Friday the reality of upcoming Brexit risks finally started to show up in the Pound,
also driven lower by continued negative risk flows which does impact the Pound
from time to time.
This upcoming week will be big for the Pound with high-level Brexit talks, Bank of
England policy meeting as well as some interesting data points. Make sure to
catch our Top Trading Opportunities Report for more info on these events.
EUR:
Another big week for the Euro! The Euro has had a bit of a perfect storm
recently with hopes of the Recovery Fund as well as the ECB over-
delivering on their PEPP program with an additional 600 billion Euros
planned until next year.
This has seen a sizable move lower in the BTP/Bund spread which means
risk premiums for the Euro has decreases substantially.
However, another factor that has seen the Euro enjoy a monster rally, has
been the broad-based US Dollar weakness. As long as the reflation trade
narrative is making the rounds and hopes for a faster global recovery is in
tact we can expect downside for the US Dollar which will be a big plus for
the Euro.
Whether the Recovery Fund passes and whether it actually leads to
economic recovery is a question for another day :-)
Forex Source: COT Currency Report