Quote of the day: “Get your facts first, and then you can distort them as much as you please” ~ Mark Twain
Good morning. The dollar continues to lose ground as risk sensitive currencies rebound after consolidating for a week. Short covering also fueled current recovery along with market optimism that European Leaders will act decisively – solving the region’s debt crisis. The final decisions about the Euro-area debt crisis is expected to be made at the Brussels summit on Wednesday.
According to latest COT data, bears are still around and are not impressed:
Euro COT 10-24-2011
As seen below – the euro is aiming towards 1.400 where next resistance is formed. The “Risk On” game is likely to continue as Europe awaits decisions from Brussels summit.
Euro Vs US Dollar Chart Daily 10-24-2011
The S&P500 COT chart is more interesting, as there’s a clear change in stance
S&P500 COT 10-24-2011
Which means that dollar bears’ favourite asset is not the euro, but hey, it’s been like that for two years – and the reasons are obvious.
AUDUSD
Australian Dollar Vs US Dollar Chart Daily 10-24-2011
According to the COT data, the number of contracts is expected to rise towards September’s figures, as price is approaching 1.0500
AUD COT 10-24-2011
AUDJPY
Resistance around 80 is likely to be tested as the cross is still lagging behind AUDUSD, which is alread trading above recent highs. Looking for buying opportunities is probably the best bet right now
Australian Dollar vs Japanese yen Chart Daily 10-24-2011
USDCAD
next support is seen at parity and we’re getting closer. Keep an eye on it…
US Dollar vs Canadian Dollar Chart Daily 10-24-2011
AUDNZD
Still unchanged as the range is intact, but I remain bullish as long as it holds above 1.2800, looking for new buying opportunities on the potential break above 1.2935/50
Australian Dollar Vs New Zealand Dollar Chart Daily 10-24-2011
have a great day!
Hi Liviu,
Thanks for the charts analysis. Regarding EUR Globex COT, what is your interpretation from the traders position? Commercial has't been changed much and large traders' net short position has been down around 5,000 compared to early October with last week. But the price moved from 1.32 to 1.39.
Cheers
Charlie
Hi Charlie,
It's only the "large traders" figures that matter. Ignore the Commercials as they are hedging, being the opposite of large traders (i.e.: large traders short – commercials long). Also ignore the small specs, they're always around 0.
Basically the large traders figure is a more natural momentum oscillator. Lagging? yes. Useless on short-term basis? yes. But if one cares about the medium and long term sentiment, then it is meaningful. (best seen on weekly charts)
Regarding current Euro figures, there's some short covering going on as we trade back towards 1.4, hence the change in net shorts.
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