COT Report 11.07.2014.
No clear trends, low volatility, very tight ranges. As you see life of traders are not see easy lately. We still have our COT Report though and can hopefully find some strong and weak currencies for next week. Very important that the percentile factors will always show the non-commercial speculators:
AUD: our rollercoaster currency is still very bullish with sentiment but cannot get much gain because of weak fundamentals. Cotbase.com bullish trend is stronger and 68.90% of non-commercials are long. It is hard to push the pair still higher.
CAD: 54.84% are long. Because of Fridays’ bearish movement is not in the COT report just like not in the cotbase.com report I think the data is irrelevant and not useful. My strong view on CAD got hit as with one negative report the currency lost such a huge amount of pips. I will most likely stay on the sidelines with CAD then next week and try to understand what is driving the currency.
CHF: 36.42% long, exactly the same as last time (it was 36.42% long). CHF has extreme tight ranges, very boring currency at this time. If you are a scalper, you can look for EUR/CHF and USD/CHF trades because of little spreads, besides that I suggest to forget this currency for now.
GBP: 65.82% long, not as bullish as it was in the last month! The long uptrend stopped in many pairs for the GBP. Is it end of the bullish tendency or just a consolidation? It is a very interesting and important question. I will remain with my bias from last week: short-term bullish, long-term bearish plan. I will look for small bullish trades to catch some pips with tight stop losses.
NZD: 68.44% bullish, a lot more than last week (60.17%). It is not even on a COT extreme, had no fundamentals last week and was beating up the counter currencies. People just love carry trade. If I change slowly my bias on a currency then it is the NZD. However I do not consider in tight markets to trade this currency besides the USD or AUD.
EUR: 31.75% are long, almost the same as last week. Open interest also. The currency wasn’t as weak though as earlier, but the fundamentals are not getting any better. The Portugal “crisis” happened also after the publishing of the report so EUR could be a bit more bearish as what we see in the report. What we have to pay attention though is the cotbase.com report on EUR. Large speculators are already on an extreme short level which might be an explanation why the downtrend stopped and why it is so difficult to push EUR more down. EUR has tight spreads against USD, CHF and GBP and if I look for opportunities then it will be on the short side.
JPY: 12.59% would be extreme level for other currencies but we got used to such results for the JPY. Just like it was with CAD, I think the report is not so relevant for JPY as the currency managed some nice gains in the last 3 days of the week which were not part of the report. As I already have written in my weekly evaluation, the cause of the gains would be good to know because fundamentals were actually negative. Risk aversion could be the right reason. As far as there are wars and uncertainties JPY could make gains. And if not risk-aversion, other economies produce many negative reports so I change my short-term bias to bullish.
USD: no clear monetary policy + mixed fundamentals + no carry trade + ranging markets = mixed results. I will still trade USD because of low spreads and altogether it has mixed results but it shows me quite good which are stronger and which are weaker currencies. It loses against the stronger currencies and is ranging against others.
My current analysis shows the following results:
Bullish: GBP (short-term), NZD (short-term), JPY (short-term)
Neutral: EUR, CHF, CAD, USD
Bearish: AUD, GBP (long-term)