We make up a weekly medium-term trade list based on CFTC reports and technical analysis.
The overview provides a description of the technical condition of the market on the most popular financial instruments, as well as information on the large speculators’ actions according to the last COT reports and the previous period. If you want to use CFTC reports in your trading practice, you should understand that for an objective assessment of the situation it’s not enough to know the data of the last report. The dynamic is more important, in other words, comparing the statistics of large speculators’ actions in the current period with the previous one, so we mention both values.
The support level was broken on the daily time frame on Monday, the trend is bearish now. A pullback selling opportunity will appear after the correction formation on the daily time frame. Short positions will remain relevant until the price is below the resistance level, the highs of January 26.
At the same time CFTC reports indicate that large speculators go on buying and the professionals’ opinion no longer corresponds to the technical picture and it makes sense to reduce the position size when an entry point appears in the trend direction.
E-Mini S&P 500. Technical analysis and COT net position indicator.
US Dollar Index (DXY)
The American dollar remains in the medium-term bear trend and the correction develops on the daily time frame. Short positions will remain relevant until the market is below the nearest resistance level on the daily time frame, the highs of January 17 – 19. A pullback selling opportunity from this level will most likely appear within next week or it will be broken, the trend will change and a breakout buying opportunity will be formed.
CFTC reports indicate that large speculators began to buy dollar, hedgers are selling and the professionals’ opinion doesn’t correspond to the daily trend direction and it makes sense to reduce the position size when an entry point appears in the trend direction.
Dollar Index (DXY). Technical analysis and COT net position indicator.
Euro (EUR/USD)
The support level was broken on the daily time frame on Wednesday, the trend is bearish now. A pullback selling opportunity will appear after the correction formation on the daily time frame. Short positions will remain relevant until the market is below the nearest resistance level on the daily time frame, the highs of February 1 – 2.
COT indicator reversed, large speculators began to sell euro and the professionals’ opinion corresponds to the market technical picture.
EUR/USD. Technical analysis and COT net position indicator.
Swiss Franc (USD/CHF)
USD/CHF currency pair remains in the medium-term bear trend and the correction wave develops. USD/CHF short positions will remain relevant until the market is below the nearest resistance level on the daily time frame, the highs of February 7 – 8. A pullback selling opportunity from this level will most likely appear within next week or it will be broken, the trend will change and a breakout buying opportunity will be formed.
COT indicator increases, large speculators go on buying franc and the professionals’ opinion corresponds to the daily trend direction.
CHF/USD. Technical analysis and COT net position indicator.
British Pound (GBP/USD)
The support level was broken on the daily time frame on Monday, the trend is bearish now. A pullback selling opportunity will appear after the correction formation on the daily time frame. Short positions will remain relevant until the market is below the nearest resistance level on the daily time frame, the highs of February 1 – 2.
COT indicator reversed. CFTC reports indicate that large speculators began to sell Pound and hedgers are buying and the professionals’ opinion corresponds to the daily trend direction.
GBP/USD. Technical analysis and COT net position indicator.
Japanese Yen (USD/JPY)
USD/JPY currency pair remains in the bear trend on the daily time frame and the impulse wave develops. A pullback selling opportunity will appear after the correction formation on the daily time frame. USD/JPY short positions will remain relevant until the market is below the resistance level, the highs of February 2 – 5.
COT indicator increases, large speculators go on buying yen and the professionals’ opinion corresponds to the daily trend direction.
JPY/USD. Technical analysis and COT net position indicator.
WTI Crude Oil (CLH18)
The support level was broken on the daily time frame on Wednesday, the trend is bearish now. A pullback selling opportunity will appear after the correction formation on the daily time frame. Short positions will remain relevant until the market is below the nearest resistance level on the daily time frame, the highs of February 1 – 2.
COT net position indicator increases. Professionals’ opinion doesn’t correspond to the daily trend direction and it makes sense to reduce the position size when an entry point appears in the trend direction.
WTI Crude Oil. Technical analysis and COT net position indicator.
Canadian Dollar (USD/CAD)
The resistance level was broken on the daily time frame on Wednesday, USD/CAD trend is bullish now. A pullback buying opportunity will appear after the correction formation on the daily time frame. USD/CAD long positions will remain relevant until the market is above the nearest support level on the daily time frame, the lows of February 1 – 2.
CFTC reports indicate that large speculators go on buying the Canadian dollar and hedgers are selling and the professionals’ opinion doesn’t correspond to the market technical picture and it makes sense to reduce the position size when an entry point appears in the trend direction.
CAD/USD. Technical analysis and COT net position indicator.
Gold (XAU/USD)
The support level was broken on the daily time frame on Tuesday, the trend is bearish now. A pullback selling opportunity will appear after the correction formation on the daily time frame. Short positions will remain relevant until the market is below the nearest resistance level on the daily time frame, the highs of February 1 – 2.
COT indicator reversed, large speculators began to sell gold and the professionals’ opinion corresponds to the technical picture.
Gold. Technical analysis and COT net position indicator.
Silver (XAG/USD)
The silver market remains in the medium-term bear trend and the impulse wave develops on the daily time frame. A pullback selling opportunity will appear after the correction formation on the daily time frame. Short positions will remain relevant until the market is below the resistance level, the highs of January 31 – February 1.
At the same time CFTC reports indicate that large speculators go on selling and hedgers are buying. Professionals’ opinion corresponds to the technical picture.
Silver. Technical analysis and COT net position indicator.
Australian Dollar (AUD/USD)
The support level was broken on the daily time frame on Thursday, the trend is bearish now. A pullback selling opportunity will appear after the correction formation on the daily time frame. Short positions will remain relevant until the market is below the resistance level on the daily time frame, the highs of January 26 – 30.
COT net position indicator increases. Large speculators are buying and hedgers are selling. Professionals’ opinion no longer corresponds to the daily trend direction and it makes sense to reduce the position size when an entry point appears in the trend direction.
AUD/USD. Technical analysis and COT net position indicator.
New Zealand Dollar (NZD/USD)
The support level was broken on the daily time frame on Wednesday, the trend is bearish now. A pullback selling opportunity will appear after the correction formation on the daily time frame. Short positions will remain relevant until the market is below the resistance level, the highs of February 6 – 7.
CFTC reports indicate that large speculators go on buying and the professionals’ opinion doesn’t correspond to the technical picture now.
NZD/USD. Technical analysis and COT net position indicator.
Russian rouble (USD/RUB)
The resistance level was broken on the daily time frame on Monday, USD/RUB currency pair is in the uptrend now. A pullback buying opportunity will appear after the correction formation on the daily time frame. USD/RUB long positions will remain relevant until the market is above the support level, the lows of February 1 – 2.
COT indicator decreases along with the market and large speculators go on selling rouble and the professionals’ opinion corresponds to the daily trend direction.
RUB/USD. Technical analysis and COT net position indicator.
Conclusions
In terms of medium-term trading, financial instruments with the correction close to completion on the daily time frame and with potentially the most promising risk-reward ratio are GBP/AUD, EUR/CAD.
In the near future EUR/USD, GBP/USD, NZD/USD can become noteworthy depending on the market correction depth.
Other financial instruments in the trade list may be also interesting, but in these markets pullback signals on the daily time frame are likely to occur no earlier than a week.