The Commitments of Traders (CoT) Report

PUBLISHED: JAN 14, 2019 07:22 GMT

Open interest in JPY futures markets increased by more than 2K contracts on Friday from the previous day’s final 227,818 contracts, reverting two consecutive daily drops, according to CME Group. On the other hand, volume shrunk noticeably by around 35.6K contracts, recording the second drop in a row.

USD/JPY appears sidelined below 109.00

USD/JPY’s 2-day up move was on the back of choppy activity in open interest and declining volume. That said, further consolidation looks likely in the short-term horizon, while the 109.00 area is expected to limit the upside for the time being.

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JAN 16, 2019 07:17 GMT

CME Group’s flash data for JPY futures markets noted open interest dropped by just 339 contracts on Tuesday from Monday’s final 230,051 contracts. Volume, instead, increased by around 46.1K contracts after three consecutive drops.

USD/JPY seen sidelined below 109.00

USD/JPY is prolonging the multi-session sideline theme so far today. Alternating trends in open interest along with a somewhat declining volume should leave the ongoing consolidative stance unchanged in the near term.

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Last Updated: 01/16/19

National Financial Conditions Index (NFCI)

The Chicago Fed’s National Financial Conditions Index (NFCI) provides a comprehensive weekly update on U.S. financial conditions in money markets, debt and equity markets and the traditional and “shadow” banking systems. Because U.S. economic and financial conditions tend to be highly correlated, we also present an alternative index, the adjusted NFCI (ANFCI). This index isolates a component of financial conditions uncorrelated with economic conditions to provide an update on financial conditions relative to current economic conditions.
The NFCI and ANFCI are updated on a weekly basis at 8:30 a.m. ET on Wednesday, and cover the time period through the previous Friday. When a federal holiday falls on a Wednesday or earlier in the week, the NFCI and ANFCI will be updated on Thursday.

Latest NFCI Release
Index Points to Looser Financial Conditions in Week Ending January 11

The NFCI ticked down to –0.75 in the week ending January 11. Risk indicators contributed –0.28, credit indicators contributed –0.31, and leverage indicators contributed –0.15 to the index in the latest week.

The ANFCI was unchanged in the latest week at –0.59. Risk indicators contributed –0.39, credit indicators contributed –0.36, leverage indicators contributed –0.12, and the adjustments for prevailing macroeconomic conditions contributed 0.27 to the index in the latest week.

The NFCI and ANFCI are each constructed to have an average value of zero and a standard deviation of one over a sample period extending back to 1971. Positive values of the NFCI have been historically associated with tighter-than-average financial conditions, while negative values have been historically associated with looser-than-average financial conditions. Similarly, positive values of the ANFCI have been historically associated with financial conditions that are tighter than what would be typically suggested by prevailing macroeconomic conditions, while negative values have been historically associated with the opposite.

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You may use this tool to gauge the financial liquidity - more importantly look at the ANFCI values

1. When liquidity is tightening, take bearish trades. When liquidity is loosening, take bullish trades (USD centric).
2. Risk is a coincident indicator, credit is a lagging indicator, and leverage is a leading indicator of financial stress.

PUBLISHED: JAN 17, 2019 06:32 GMT

In light of CME Group’s advanced figures from EUR futures markets, investors trimmed their open interest positions by just 223 contracts on Wednesday from Tuesday’s final 526,058 contracts. In the same line, volume shrunk significantly by around 78.2K contracts.

EUR/USD chances of a U-turn near term

EUR/USD continues to lose ground this week. However, declining prices amidst shrinking open interest and volume could open the door for a probable reversion and subsequent squeeze higher in the very near term.

I have watched all his videos since the beginning of December 2018... And it is pretty good information which may change your trading strategy for the better.

The charts have a yellow background that indicates the square dimension of the chart. The orange dot indicates today's position relative to the high (top of chart) and low (bottom of chart) of the FX index during the last 365 days. So if the orange dot is close to the top, the currency is close to its highest valuation. If the orange dot is close to the bottom, the currency is near its lowest valuation. The blue bars indicate the distribution of valuations over the course of one year. The span between high and low valuation is divided into ten ranges (ie, deciles). Then the number of days during which the currency's valuation has been in each of these deciles is counted.

The number of days is proportional to the width of each of the ten blue bars. Thus the position of the orange dot relative to the width of the blue bars indicates if the current valuation is a relatively common event or a relatively rare event. For example, if the bulk of valuations has been in the lower deciles, and the orange dot is near the top where the bars are narrow, the currency has recently moved up sharply. These charts ("FX conifers") are a simple method of visually summarizing the performance of a currency over the time period of one year. One useful feature of this chart is that it automatically adjusts for the different volatility of currencies, as the span between one-year high and one-year low is a reflection of a currency's volatility.

PUBLISHED: JAN 18, 2019 06:52 GMT

CME Group’s flash data for EUR futures markets showed traders added around 1.1K contracts to their open interest positions on Thursday vs. Wednesday’s final 525,546 contracts. In the same line, volume rose by more than 8.3K contracts following the previous sharp drop.

EUR/USD seen rangebound so far

EUR/USD is extending the sideline theme around the 1.1400 handle, the lower bound of the weekly range, amidst an uptick in both open interest and volume. That said, extra consolidation is thus expected, at least in the short-term horizon.

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PUBLISHED: JAN 18, 2019 07:07 GMT

GBP futures markets from CME Group noted open interest dropped by nearly 2K contracts on Thursday from Wednesday’s final 216,613 contracts. Volume followed suit, shrinking by almost 16.2K contracts and clinching the second drop in a row.

GBP/USD capped by 1.3000 so far

Cable’s sharp move higher on Thursday was in tandem with declining open interest and volume, adding to the idea that a pause in the ongoing rally is expected (and logical). In this regard, the 1.3000 handle is seen as a strong nut to crack and bulls would surely need a strong catalyst to surpass this level.

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PUBLISHED: JAN 21, 2019 06:48 GMT

In light of CME Group’s advanced data for GBP futures markets, investors scaled back their open interest positions by around 1K contracts on Friday vs. Thursday’s final 214,787 contracts. In the same line, volume dropped by nearly 12.1K contracts.

GBP/USD faces key week, 1.30 caps the upside

The recent up move in Cable was in tandem with declining open interest and volume, hinting at the likelihood that extra gains could lose some momentum in the next sessions. In the meantime, Brexit negotiations face a key day as PM T.May is expected to deliver a ‘Plan B’.


>>>>>>>>>>>>>>>>>>>>>
...initial move was last Friday

PUBLISHED: JAN 21, 2019 08:52 GMT

Flash data for JPY futures markets from CME Group noted open interest clinched the fourth drop in a row on Friday, this time by just 570 contracts. In the same direction, volume shrunk by around 14.5K contracts.

USD/JPY faces strong resistance at 110.00

USD/JPY keeps the march north unabated despite today’s correction so far. The recent down tick in open interest and volume opens the door, however, for some caution as we get closer to the critical 110.00 handle.

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PUBLISHED: JAN 22, 2019 05:07 GMT

1. USD/JPY is feeling the pull of gravity, possibly due to haven demand for the anti-risk JPY.
2. IMF’s downward revision of global growth forecasts is likely weighing over the S&P 500 futures and Asian stocks.

The USD/JPY pair is currently trading at the 5-day moving average (MA) support 109.44, having clocked a high of 109.69 earlier today.

That pullback is likely associated with the risk aversion in the equities and the resulting haven bid for the Japanese yen – surplus currency.

As of writing, the S&P 500 futures are reporting a 0.66 percent loss. Meanwhile, Asian heavyweights like Nikkei, Kospi, Hang Seng, and the Shanghai Composite are down at least 0.6 percent.

It seems the risk sentiment has taken a hit due to the International Monetary Fund’s (IMF) downward revision of the global growth forecasts. The fund predicts global growth of 3.5 percent this year, beneath the 3.7 percent expected in October, according to Bloomberg.
Further, the prospects of a breakthrough US-China trade deal are low, given the two sides have made little or no progress on key issues like the Chinese theft of American intellectual property.

Put simply, the path of least resistance for both the equities and the USD/JPY looks to be on the downside.

PUBLISHED: JAN 22, 2019 08:10 GMT
FOREX NEWS

EUR/USD extends its downward drift as worries mount.

The return of US traders and growing tension towards the ECB decision dominate.

EUR/USD extends its gradual decline and trades around 1.1350. Markets are lower in Asia and around the world as the US moves forward with requesting the extradition of Meng Wanzhou, the CFO of Huawei and the founder’s only child. The high-ranking official is held in Canada, and her detention in December dampened relations between the world’s two largest economies. Also, Chinese President Xi Jinping summoned a special meeting of the Party and warned about “serious dangers” as economic risks mount.

These concerns weigh on stocks and spur demand for the safe-haven Japanese yen and US Dollar.

In the old continent, things are no better. The European Commission lowered Italy’s growth forecasts to only 0.6% for the whole of 2019. The move comes just two days ahead of the all-important decision by the European Central Bank.

The ECB, led by its Italian President Mario Draghi, is set to leave all its policy measures unchanged after it ended the bond-buying scheme in December. The statement still pledges a low-interest rate “through the summer,” opening the door to a rate hike in September. However, despite optimism about employment and wages, economic growth has significantly slowed down. Germany probably escaped a technical recession, but its contraction in Q3 does not bode well.

Later today, the German ZEW Economic Sentiment for January will shed some light on the prospects for the euro zone’s locomotive. In the US, Existing Home Sales will be watched for any signs of weakness in this sector. Both are second-tier figures.

US traders return to the scene after a long weekend. Higher trading volume is expected, and perhaps volatility will pick up as well.

The record-long government shutdown continues with no apparent end in sight. The economic damage is already more than anecdotal. Also, several top-tier economic indicators have not been published.

PUBLISHED: JAN 29, 2019 07:32 GMT

CME Group’s advanced figures for JPY futures markets noted open interest dropped by almost 1.5K contracts on Monday from Friday’s final 208,796 contracts. Volume followed suit, down by around 20K contracts.

USD/JPY keeps the sideline theme unchanged

USD/JPY continues to ease from recent peaks near the 110.00 handle. Declining open interest and volume should limit the downside somewhat, leaving intact the broader consolidative theme.

Attached Image (click to enlarge)

Latest NFCI Release: Last Updated: 01/24/19

Index Points to Looser Financial Conditions in Week Ending January 18

The NFCI edged down to –0.78 in the week ending January 18. Risk indicators contributed –0.30, credit indicators contributed –0.32, and leverage indicators contributed –0.15 to the index in the latest week.

The ANFCI ticked up in the latest week to –0.58. Risk indicators contributed –0.37, credit indicators contributed –0.36, leverage indicators contributed –0.12, and the adjustments for prevailing macroeconomic conditions contributed 0.28 to the index in the latest week.

The NFCI and ANFCI are each constructed to have an average value of zero and a standard deviation of one over a sample period extending back to 1971. Positive values of the NFCI have been historically associated with tighter-than-average financial conditions, while negative values have been historically associated with looser-than-average financial conditions. Similarly, positive values of the ANFCI have been historically associated with financial conditions that are tighter than what would be typically suggested by prevailing macroeconomic conditions, while negative values have been historically associated with the opposite.

Attached Image (click to enlarge)

You may use this tool to gauge the financial liquidity - more importantly look at the ANFCI values

1. When liquidity is tightening, take bearish trades. When liquidity is loosening, take bullish trades (USD centric).
2. Risk is a coincident indicator, credit is a lagging indicator, and leverage is a leading indicator of financial stress.

PUBLISHED: JAN 30, 2019 07:17 GMT

Advanced figures for GBP futures markets noted investors trimmed their open interest positions by nearly 2.5K contracts on Tuesday vs. Monday’s final 209,156 contracts. On the other hand, volume increased sharply by almost 87K contracts.

GBP/USD rejected from tops beyond 1.3200

Cable is posting some decent gains on Wednesday following two consecutive days with losses. Shrinking open interest could alleviate the downside pressure, although the important advance in volume favours a deeper retracement.

Attached Image (click to enlarge)

PUBLISHED: JAN 30, 2019 07:57 GMT

JPY futures markets showed open interest dropped for the second session in a row on Tuesday, this time by nearly 2.3K contracts, according to flash data from CME Group. In the same direction, volume shrunk by a modest 3.4K contracts.

USD/JPY seen sidelined for the time being

USD/JPY is prolonging the rangebound theme so far this week amidst declining open interest and volume. Despite a move lower is still in the pipeline, the continuation of the ongoing consolidations appears most likely in the short-term horizon.

Attached Image (click to enlarge)