Special Thread: COT Data Analysis & Trading Signals

You May move SL to BE | GBPUSD-M30.

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GBPCAD - COT Data Weekly Analysis | Week Ending (April 23, 2024)

Net Bias: Neutral with Bearish Potential - The Non-Commercial COT data for GBPCAD suggests a relatively neutral bias with potential bearish undertones. While both GBP and CAD exhibit net short positions among non-commercial traders, the recent increase in GBP shorts and decrease in longs suggests a slightly stronger bearish sentiment for GBP compared to CAD.

Key Individual Currency Sentiment:

1. GBP (British Pound):
   1. Non-Commercial:
      1. Net Position: Short bias
      2. Net Position as a Percentage of Open Interest: -26.2%
      3. Changes in Positioning: Long positions decreased significantly while short positions increased.
      4. Open Interest Trends: Increasing
      5. Total Open Interest: 242,821

   2. Non-Commercial Long Contracts: Decreased by 23,341 contracts (-48.2%)
   3. Non-Commercial Short Contracts: Increased by 11,511 contracts (18.3%)

2. CAD (Canadian Dollar):
   1. Non-Commercial:
      1. Net Position: Short bias
      2. Net Position as a Percentage of Open Interest: -32.8%
      3. Changes in Positioning: Both long and short positions decreased.
      4. Open Interest Trends: Decreasing
      5. Total Open Interest: 226,747

   2. Non-Commercial Long Contracts: Decreased by 1,194 contracts (-3.2%)
   3. Non-Commercial Short Contracts: Decreased by 7,559 contracts (-6.3%)

Implications for GBPCAD:

1. Potential Direction: While the overall bias appears relatively neutral, the recent shift in GBP positioning with a significant reduction in long contracts and an increase in shorts suggests a potential weakening of GBP relative to CAD. This could lead to a slight downward pressure on the GBPCAD pair.
2. Volatility: The notable changes in GBP positioning, particularly the sharp decrease in long contracts, might contribute to increased volatility in GBPCAD. If this shift in sentiment continues or strengthens, it could lead to more pronounced price swings in the pair.
3. Market Depth: The total open interest for both GBP and CAD is relatively high, indicating good liquidity in the market. This suggests that traders should be able to enter and exit positions in GBPCAD efficiently.

Trading Recommendations:

1. Cautious Approach: Given the neutral bias with bearish potential, traders should adopt a cautious approach to GBPCAD. Consider waiting for clearer confirmation signals, such as a sustained increase in GBP short positions or a breakout of key technical levels, before entering a trade.
2. Consider Short Positions with Tight Stops: For traders with a higher risk tolerance, short positions in GBPCAD could be considered based on the recent shift in GBP sentiment. However, implementing tight stop-loss orders is crucial to manage risk exposure in case of a sudden reversal.
3. Monitor GBP and CAD Pairs: Pay close attention to other GBP and CAD pairs, such as GBPUSD, EURGBP, USDCAD, and AUDCAD, to assess broader market sentiment and identify potential confirmation or divergence signals.

GBPCAD - H1

Why use the COT Reports when real-time "commitment of traders" is being reported live constantly in the futures and options markets - i.e., in the volume and Time & Sales data?

Because COT report is the most complete data, thats why it comes out once a week, your broker only has their clients to report on

in otc markets, maybe so. In futures and options, you have data direct from the exchanges in real time.

Its still very incomplete data

COT Data Analysis - April 30, 2024

GBPNZD - M30 | Active Trade

COT Data Analysis - May 07, 2024

SWISS FRANC - (Code-092741)

1. Report Date: May 14, 2024
2. Total Open Interest: 90,701 contracts

Non-Commercial Positioning

1. Net Position: -41,107 contracts (-45.3% of Open Interest)
2. Long Positions: 6,646 contracts (7.3% of Open Interest)
3. Short Positions: 47,753 contracts (52.6% of Open Interest)
4. Spreading Positions: 1,189 contracts (1.3% of Open Interest)

=

CANADIAN DOLLAR - (Code-090741)

1. Report Date: May 14, 2024
2. Total Open Interest: 220,840 contracts

Non-Commercial Positioning

1. Net Position: -80,303 contracts (-36.4% of Open Interest)
2. Long Positions: 34,286 contracts (15.5% of Open Interest)
3. Short Positions: 114,589 contracts (51.9% of Open Interest)
4. Spreading Positions: 6,436 contracts (2.9% of Open Interest)

=

BRITISH POUND - (Code-096742)

1. Report Date: May 14, 2024
2. Total Open Interest: 223,242 contracts

Non-Commercial Positioning

1. Net Position: 81,925 contracts (36.7% of Open Interest)
2. Long Positions: 48,674 contracts (21.8% of Open Interest)
3. Short Positions: 68,749 contracts (30.8% of Open Interest)
4. Spreading Positions: 10,782 contracts (4.8% of Open Interest)

=

EURO FX - (Code-099741)

1. Report Date: May 14, 2024
2. Total Open Interest: 656,802 contracts

Non-Commercial Positioning

1. Net Position: 17,155 contracts (2.6% of Open Interest)
2. Long Positions: 178,398 contracts (27.2% of Open Interest)
3. Short Positions: 161,243 contracts (24.5% of Open Interest)
4. Spreading Positions: 14,120 contracts (2.1% of Open Interest)

=

AUSTRALIAN DOLLAR - (Code-232741)

1. Report Date: May 14, 2024
2. Total Open Interest: 201,798 contracts

Non-Commercial Positioning

1. Net Position: -77,171 contracts (-38.2% of Open Interest)
2. Long Positions: 40,059 contracts (19.9% of Open Interest)
3. Short Positions: 117,230 contracts (58.1% of Open Interest)
4. Spreading Positions: 4,262 contracts (2.1% of Open Interest)

=

NEW ZEALAND DOLLAR - (Code-112741)

1. Report Date: May 14, 2024
2. Total Open Interest: 55,640 contracts

Non-Commercial Positioning

1. Net Position: -11,200 contracts (-20.1% of Open Interest)
2. Long Positions: 19,284 contracts (34.7% of Open Interest)
3. Short Positions: 30,484 contracts (54.8% of Open Interest)
4. Spreading Positions: 222 contracts (0.4% of Open Interest)

=

SOUTH AFRICAN RAND - (Code-122741)

1. Report Date: May 14, 2024
2. Total Open Interest: 43,478 contracts

Non-Commercial Positioning

1. Net Position: 2,739 contracts (6.3% of Open Interest)
2. Long Positions: 35,502 contracts (81.7% of Open Interest)
3. Short Positions: 32,763 contracts (75.4% of Open Interest)
4. Spreading Positions: 90 contracts (0.2% of Open Interest)

=

USD INDEX - (Code-098662)

1. Report Date: May 14, 2024
2. Total Open Interest: 42,817 contracts

Non-Commercial Positioning

1. Net Position: 2,435 contracts (5.7% of Open Interest)
2. Long Positions: 29,682 contracts (69.3% of Open Interest)
3. Short Positions: 27,247 contracts (63.6% of Open Interest)
4. Spreading Positions: 1,128 contracts (2.6% of Open Interest)

=

GOLD - (Code-088691)

1. Report Date: May 14, 2024
2. Total Open Interest: 522,952 contracts

Non-Commercial Positioning

1. Net Position: 204,596 contracts (39.1% of Open Interest)
2. Long Positions: 277,642 contracts (53.1% of Open Interest)
3. Short Positions: 73,146 contracts (14.0% of Open Interest)
4. Spreading Positions: 59,094 contracts (11.3% of Open Interest)

SECTION A: Non commercial

COT Net Bias Analysis for GBPUSD - Week Ending May 14, 2024
Individual Currencies:

1. BRITISH POUND: Net Long (0.5%) Increased by 19,128 contracts (1,820.9%) since last week. Open interest is increasing. Long contracts increased by 19,864 (28.9%), and short contracts decreased by -1,264 (-1.9%).
2. USD INDEX: Net Long (8.8%) Decreased by 1,093 contracts (-23.7%) since last week. Open interest is decreasing. Long contracts decreased by -1,390 (-4.7%), and short contracts decreased by -2,473 (-9.0%).

Currency Pair:

1. Overall Net Bias: Bullish
2. Key Drivers:
   1. The British pound is net long, and its net long position increased significantly since last week, indicating a strong bullish sentiment.
   2. The US dollar index is net long, but its net long position decreased since last week, suggesting a weakening bullish sentiment.
   3. Open interest for the British pound is increasing, while it is decreasing for the US dollar index, indicating a potential shift in market participation towards the pound.

Potential Market Implications:
The overall net bias for GBPUSD is bullish, primarily driven by the substantial increase in the net long position of the British pound. While the US dollar index also shows a net long position, its decrease and the declining open interest suggest a weakening bullish sentiment for the dollar. The increasing open interest for the British pound indicates growing market participation and potential for further upward price movement.
Trading Recommendations (Optional):
Given the strong bullish bias for GBPUSD, traders could consider entering long positions with appropriate risk management strategies. However, it's crucial to monitor the evolving market sentiment and open interest trends for both currencies, as any significant shifts could impact the pair's future direction.



SECTION B: COMMERCIALS.

COT Net Bias Analysis for GBPUSD - Week Ending May 14, 2024

Key Individual Currency Sentiment:

1. BRITISH POUND:
   1. Commercial Net Position: Neutral (0.0%)
   2. Changes in Net Position: Decrease from previous week
   3. Open Interest Trend: Increasing
   4. Commercial Long Contracts: -26,520 (-19.2%)
   5. Commercial Short Contracts: 295 (0.3%)

2. USD INDEX:
   1. Commercial Net Position: Net Short (-10.2%)
   2. Changes in Net Position: Decrease from previous week
   3. Open Interest Trend: Decreasing
   4. Commercial Long Contracts: -1,083 (-12.7%)
   5. Commercial Short Contracts: -788 (-6.5%)

Net Bias for GBPUSD:

1. Overall Bias: Neutral
   1. Rationale: The overall bias for GBPUSD is neutral due to conflicting signals from the commercial net positions of the British pound and the US dollar index. The British pound shows a neutral position, while the US dollar index exhibits a net short position with a decreasing trend. This suggests that commercials are reducing their short positions in the US dollar index, which could potentially weaken the dollar and support the pound. However, the neutral position of the British pound indicates a lack of clear directional bias from commercial traders.

Potential Market Implications:
The conflicting signals from the commercial net positions of the British pound and the US dollar index create a neutral bias for GBPUSD. The decreasing net short position in the US dollar index could weaken the dollar and support the pound, but the neutral position of the British pound indicates a lack of clear directional bias from commercial traders. This situation calls for a cautious approach and further analysis using other technical or fundamental indicators to determine the future direction of the currency pair.

Trading Recommendations (Optional):
Given the neutral bias, traders should exercise caution and avoid taking large directional positions on GBPUSD. It would be prudent to wait for further confirmation from other technical or fundamental indicators before entering any trades. Alternatively, traders could consider strategies that profit from range-bound markets, such as selling volatility or implementing mean-reversion strategies.

SECTION C: TOTAL NET BIAS FOR BOTH COMMERCIAL AND NON-COMMERCIAL

Net Bias Consolidation:
Participant CategoryCurrency 1 BiasCurrency 2 BiasOverall Pair Bias
Non-CommercialNet LongNet LongBullish
CommercialNeutralNet ShortBearish
Final Net Bias for GBPUSD:

1. Overall Bias: Mixed (with explanation)

Rationale:
The final net bias for GBPUSD is mixed, as there is disagreement between the non-commercial and commercial positions. Non-commercial traders are net long on both the British pound and the US dollar index, indicating a bullish sentiment. However, commercial traders are neutral on the pound and net short on the dollar, suggesting a potential bearish outlook.

In this case, the non-commercial bias might be more influential due to the substantial increase in the net long position of the British pound and the decreasing net long position of the US dollar index. However, the neutral position of commercial traders on the pound suggests that they are not actively betting on its appreciation, which could limit the upward potential of the pair.

Trading Recommendations (Optional):
Given the mixed bias, traders should exercise caution and consider a balanced approach. While the overall sentiment leans towards bullish, the neutral position of commercial traders on the pound warrants careful consideration. Traders could consider entering long positions on GBPUSD with appropriate risk management strategies, but it's crucial to monitor the evolving market sentiment and open interest trends for both currencies, as any significant shifts could impact the pair's future direction. Additionally, using other technical or fundamental indicators could provide further insights for making informed trading decisions.

COT Net Bias Analysis for EURGBP - Week Ending May 21, 2024

A: Non-Commercial
Individual Currencies:

1. EURO FX: Net long with 6.3% of open interest. Decreased by -15,968 contracts (-27.8%) since last week.
2. BRITISH POUND: Net long with 0.5% of open interest. Increased by 19,128 contracts (1,820.9%) since last week.

Currency Pair:

1. Overall Net Bias: Neutral (Slight Bullish Bias)
2. Key Drivers:
   1. EURO FX: Net long with 6.3% of open interest.
   2. BRITISH POUND: Net long with 0.5% of open interest.
   3. Open Interest: Overall open interest is increasing for both currencies, suggesting increased market participation.

Potential Market Implications:
The overall net bias for EURGBP is neutral, with a slight bullish bias. Both the Euro and the British Pound are net long, but the Euro's net long position is larger (6.3% vs. 0.5%). The decrease in the Euro's net long position and the significant increase in the British Pound's net long position suggest a potential shift in sentiment towards a more bullish outlook for the British Pound. The rising open interest indicates growing market participation, which could lead to increased volatility and potentially amplify price movements.

Trading Recommendations (Optional):
Given the neutral bias with a slight bullish tilt, traders might consider cautiously entering long positions on EURGBP. However, the decrease in the Euro's net long position and the significant increase in the British Pound's net long position suggest a potential for increased volatility. It's advisable to closely monitor market developments and incorporate other technical and fundamental analyses to confirm the bullish bias before entering any positions.

B: Commercial
Key Individual Currency Sentiment:

1. EURO FX:
   1. Commercial Net Position: Net Short (-10.6%)
   2. Changes in Net Position: Increase from previous week
   3. Open Interest Trend: Increasing
   4. Commercial Long Contracts: -9,694 (-2.5%)
   5. Commercial Short Contracts: 21,477 (4.8%)

2. BRITISH POUND:
   1. Commercial Net Position: Net Short (0.0%)
   2. Changes in Net Position: Decrease from previous week
   3. Open Interest Trend: Increasing
   4. Commercial Long Contracts: -26,520 (-19.2%)
   5. Commercial Short Contracts: 295 (0.3%)

Net Bias for EURGBP:

1. Overall Bias: Bearish
2. Rationale: The commercial net positions for both the Euro and the British Pound are net short, indicating an overall bearish sentiment.

Potential Market Implications:
The bearish commercial bias for EURGBP suggests a potential downward pressure on the currency pair. The increase in the net short position for the Euro and the decrease in the net short position for the British Pound (while remaining net short) could indicate a strengthening of the bearish sentiment. The overall open interest for both currencies is increasing, suggesting continued market interest and potential for volatility.

Trading Recommendations (Optional):
Given the bearish commercial bias, traders might consider short positions on EURGBP. However, the conflicting signals from the non-commercial traders and the increasing open interest warrant caution. It's advisable to incorporate other technical and fundamental analyses to confirm the bearish bias before entering any positions.

C: TOTAL NET BIAS FOR BOTH COMMERCIAL AND NON-COMMERCIAL
Net Bias Consolidation:
Participant CategoryCurrency 1 BiasCurrency 2 BiasOverall Pair Bias
Non-CommercialNet LongNet LongBullish
CommercialNet ShortNet ShortBearish
Reconciliation and Final Bias Assessment:

1. Agreement/Disagreement: The non-commercial and commercial biases for EURGBP disagree, with non-commercial traders leaning bullish and commercial traders leaning bearish.
2. Bias Strength: The non-commercial net long positions in both the Euro (6.3%) and the British Pound (0.5%) are relatively weak. The commercial net short positions in both currencies are stronger, with the Euro at -10.6% and the British Pound at 0.0%.
3. Conflicting Signals: The conflicting signals suggest uncertainty in the market direction. While non-commercial traders show a slight bullish bias, commercial traders have a stronger bearish bias.

Final Net Bias for EURGBP:

1. Overall Bias: Mixed (leaning bearish)

Rationale:
The final net bias for EURGBP is assessed as mixed, leaning bearish. This assessment is based on the stronger bearish bias from commercial traders, who are often considered more knowledgeable and experienced. While non-commercial traders show a slight bullish bias, their positions are relatively weak compared to the commercial traders' bearish positions.

Trading Recommendations (Optional):
Given the mixed bias with a bearish tilt, traders could consider cautious short positions on EURGBP. However, the conflicting signals and increasing open interest warrant careful risk management and close monitoring of market developments. It's advisable to incorporate other technical and fundamental analyses to confirm the bearish bias before entering any positions.

Disclaimer: This analysis is based solely on COT data and does not consider other market factors. Use this information at your own discretion and with thorough risk management.

COT Net Bias Analysis for GBPAUD - Week Ending May 21, 2024

A: Non-Commercial
Individual Currencies:

1. BRITISH POUND: Net long with 0.5% of open interest. Increased by 19,128 contracts (1,820.9%) since last week.
2. AUSTRALIAN DOLLAR: Net short with -28.6% of open interest. Decreased by -20,938 contracts (-27.1%) since last week.

Currency Pair:

1. Overall Net Bias: Bullish
2. Key Drivers:
   1. BRITISH POUND: Net long with 0.5% of open interest. Increased significantly by 19,128 contracts (1,820.9%) since last week.
   2. AUSTRALIAN DOLLAR: Net short with -28.6% of open interest. Decreased by -20,938 contracts (-27.1%) since last week.
   3. Open Interest: Overall open interest is increasing for both currencies, suggesting increased market participation.

Potential Market Implications:
The overall net bias for GBPAUD is bullish, primarily driven by the significant decrease in the net short position of the Australian Dollar and the substantial increase in the net long position of the British Pound. The magnitude of these changes suggests a potential shift in sentiment towards a more bullish outlook for GBPAUD. The rising open interest indicates growing market participation, which could lead to increased volatility and potentially amplify price movements.

Trading Recommendations (Optional):
Given the bullish bias, traders might consider long positions on GBPAUD. The significant increase in the British Pound's net long position and the decrease in the Australian Dollar's net short position further support the bullish outlook. However, it's advisable to closely monitor market developments and incorporate other technical and fundamental analyses to confirm the bullish bias before entering any positions.

B: Commercial
Key Individual Currency Sentiment:

1. BRITISH POUND:
   1. Commercial Net Position: Net Short (0.0%)
   2. Changes in Net Position: Decrease from previous week
   3. Open Interest Trend: Increasing
   4. Commercial Long Contracts: -26,520 (-19.2%)
   5. Commercial Short Contracts: 295 (0.3%)

2. AUSTRALIAN DOLLAR:
   1. Commercial Net Position: Net Long (26.2%)
   2. Changes in Net Position: Decrease from previous week
   3. Open Interest Trend: Increasing
   4. Commercial Long Contracts: -16,133 (-12.3%)
   5. Commercial Short Contracts: 9,416 (17.2%)

Net Bias for GBPAUD:

1. Overall Bias: Mixed
2. Rationale: The commercial net positions for the British Pound and the Australian Dollar are conflicting, with the British Pound showing a net short position and the Australian Dollar showing a net long position.

Potential Market Implications:
The mixed commercial bias for GBPAUD indicates uncertainty in the market. The decrease in the net short position for the British Pound and the decrease in the net long position for the Australian Dollar could signal a potential shift in sentiment. However, the overall open interest for both currencies is increasing, suggesting continued market interest and potential for volatility.

Trading Recommendations (Optional):
Given the mixed commercial bias, it is recommended to exercise caution and consider further analysis using other technical or fundamental indicators before establishing a position in GBPAUD.

C: TOTAL NET BIAS FOR BOTH COMMERCIAL AND NON-COMMERCIAL

Reconciliation and Final Bias Assessment:

1. Agreement/Disagreement: Both commercial and non-commercial traders are bullish on GBPAUD, as they are net short on the AUD.
2. Bias Strength: The non-commercial net long position in the British Pound is weak (0.5%), while the commercial net short position is stronger (0.0%). The non-commercial net short position in the Australian Dollar is stronger (-28.6%) than the commercial net long position (26.2%).
3. Overall: The overall sentiment for GBPAUD is bullish.

Final Net Bias for GBPAUD:

1. Overall Bias: Bullish

Rationale:
The final net bias for GBPAUD is assessed as bullish. This assessment is based on the fact that both commercial and non-commercial traders are net short the AUD. While there is some disagreement on the GBP, with non-commercial traders net long and commercial traders net short, the overall sentiment on the AUD is bearish, leading to an overall bullish bias for GBPAUD.

Trading Recommendations (Optional):
Given the bullish bias, traders could consider long positions on GBPAUD. However, the conflicting signals on the British Pound and the increasing open interest warrant careful risk management and close monitoring of market developments. It's advisable to incorporate other technical and fundamental analyses to confirm the bullish bias before entering any positions.

Disclaimer: This analysis is based solely on COT data and does not consider other market factors. Use this information at your own discretion and with thorough risk management.