EUR/USD, GBP/USD, gold, crude oil analysis: COT report

View the latest commitment of traders reports

Commitment of traders – as of Tuesday 28^th Nov, 2023:

Large speculators increased their long exposure to GBP futures by 42% last week
They also increased long exposure to CAD futures by 19% and trimmed shorts by -3%
Gross-short exposure to US dollar index futures rose by 24%
Bulls increased their long exposure to NZD futures by 27% ahead of the RBNZ’s hawkish hold last week
Asset managers flipped to net-long exposure to Dow Jones futures
Asset managers increased their net-long exposure to Nasdaq futures to a fresh near 8-year high

EUR/USD (Euro dollar futures) positioning – COT report:

Market positioning among large speculators and asset managers repeated the familiar pattern of adding to long exposure while trimming shorts. Yet a slew of weak data including inflation weighed on European bond yields and dragged the euro lower in the second half of the week, which saw EUR/USD formed a bearish outside week.

With markets now pricing in ECB cuts while the ECB already have the lower interest rate compared to the Fed, I suspect the euro has now entered a corrective phase.

GBP/USD (British pound futures) positioning – COT report:

Hawkish comments from BOE members saw asset managers and large speculator ramp up their bullish bets on GBP/USD futures, which pushed net-short exposure fall to an 8-week low. IN fact large specs increased their long exposure last week by 42%, although shorts remained effectively unchanged at just -207k contracts. With traders pricing in cuts from the Fed, we may see traders flip to net-long exposure on GBP/USD sooner than later.

Gold futures (GC) positioning – COT report:

Gold made minced meat out of the 2022 high / previous all-time high during early Asian trade on Monday, rising $75 at the open and blowing past it’s 1week implied volatility band. Lots of gold headlines are to be expected. But I remain suspicious of the move, given it occurred during low liquidity trade, and we have already seen gold hand bac much of these early gains.

Still, we can see that large speculators and managed funds continued to add to longs and trim short exposure, yet met-long exposure is far from a sentiment extreme. If bond yields keep falling then the path of least resistance seems to be higher for gold. But traders may want to be on guard for some volatility around those previous highs before its next real move unfolds.

WTI crude oil (CL) positioning – COT report:

Crude oil closed lower for a sixth week as traders were unimpressed with OPEC’s anticipated oil production cuts. Short bets increased for a sixth week and at their fastest pace in three, whilst long bets remained effectively unchanged from managed funds and large speculators. A a bearish outside week having met resistance just beneath $80, my bias is now for a move towards the original lower target of $70.

How to trade with City Index

You can easily trade with City Index by using these four easy steps:

Open an account, or log in if you’re already a customer

• Open an account in the UK
• Open an account in Australia
• Open an account in Singapore
Search for the company you want to trade in our award-winning platform
Choose your position and size, and your stop and limit levels
Place the trade

From time to time, StoneX Financial Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.

City Index is a trading name of StoneX Financial Pty Ltd.

The material provided herein is general in nature and does not take into account your objectives, financial situation or needs.

While every care has been taken in preparing this material, we do not provide any representation or warranty (express or implied) with respect to its completeness or accuracy. This is not an invitation or an offer to invest nor is it a recommendation to buy or sell investments.

StoneX recommends you to seek independent financial and legal advice before making any financial investment decision. Trading CFDs and FX on margin carries a higher level of risk, and may not be suitable for all investors. The possibility exists that you could lose more than your initial investment further CFD investors do not own or have any rights to the underlying assets.

It is important you consider our Financial Services Guide and Product Disclosure Statement (PDS) available at www.cityindex.com/en-au/terms-and-policies/, before deciding to acquire or hold our products. As a part of our market risk management, we may take the opposite side of your trade. Our Target Market Determination (TMD) is also available at www.cityindex.com/en-au/terms-and-policies/.

StoneX Financial Pty Ltd, Suite 28.01, 264 George Street, Sydney, NSW 2000 (ACN 141 774 727, AFSL 345646) is the CFD issuer and our products are traded off exchange.