CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
✖

Weekly COT Report Trade Optimism Supports CAD and AUD

Article By: ,  Financial Analyst
November 10, 2019 6:42 PM


Read our guide on how to interpret the weekly COT report


As of Tuesday 5th November:

  • Large speculators were net-long USD by $12.2 billion, down by $0.34 billion the prior week
  • CAD traders were their most bullish in two years
  • AUD traders were their least bearish since January
  • AUD also saw the largest weekly change, with net-short exposure being reduced by 13.5k contracts



USD: DXY has rebounded from key support (which is heavily weighted to Euro), yet the broader measure of USD positioning is not confirming the move. This could suggest the rebound is simply corrective, so perhaps USD will break to new lows. Yet over the near-term, bullish momentum prevails and there are no clear signs of a top forming, so the bias for USD remains bullish.



CAD: It seems that trade deal optimism has overcome the dovish BOC meeting, with net-long exposure at its highest level in 2 years. Moreover, the move is fuelled by an increase in bullish bets and reduction of shorts, which is the backbone of a healthy move. Still, seeing as demand for USD remains, it could cap volatility for USD/CAD and make directional moves harder to come by.



AUD: Bears continue to flee whilst long interest perks up. Gross-long exposure is its highest level since June 2018 and gross shorts are at their lowest level since September. Like CAD, the Aussie is reaping the rewards of better US-China trade relations, which leaves it open to further upside should the phase one trade deal get signed.



As of Tuesday 5th November:

  • Positioning on gold and silver was little changed.
  • Net-long exposure on WTI rose to a 6-week high.
  • Traders were their least bullish on Copper since June.
  • Positioning on platinum and palladium continue to diverge, with the former seeing its bullish exposure at its highest level since September 2016 and the latter seeing bullish exposure fall to a 6-week low.



Gold: Bullish exposure nudged it way to a 6-week high. Yet we’ve seen a notable drop in gold prices since the gold report was compiled, some longs may have been squeezed along the way. Spot prices are teasing a break of 1459 and, given the bearish momentum, a breakdown appears likely. Yet the core view remains that this is still part of a much-needed correction from its highs, so the bias is bearish over a near-term horizon only. After which, we’ll look for evidence that the corrective low is in.


StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.

© City Index 2024