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.
E-Mini S&P 500 (ESH18)
The trend is bullish, the impulse wave develops. New pullback buying opportunities will appear after the correction formation. Long positions will remain relevant until the market is above the nearest support level on the Daily timeframe, the lows of December 29 – January 2.
COT net position indicator increased but didn’t reverse and the professionals’ opinion doesn’t correspond to the trend direction and it makes sense to reduce the position size when an entry point appears in the trend direction.
E-Mini S&P500 (ESH18). Technical analysis and COT net position indicator.
American dollar remains in the bear trend. The market is in the correction on the Daily timeframe and a pullback selling opportunity will appear after its completion. The higher a pullback signal is formed, the more attractive risk-reward ratio will be. Short positions will remain relevant until the market is below the nearest resistance level, the highs of January 9 – 10.
COT net position indicator decreases along with the market and CFTC reports indicate that large speculators are actively selling and hedgers are buying and the professionals’ opinion corresponds to the Daily trend direction.
Dollar Index (DXY). Technical analysis and COT net position indicator.
Euro (EUR/USD)
Euro is in the correction from the highs reached earlier and the medium-term trend remains bullish. A pullback buying opportunity may be formed after the correction completion. The lower the market, the more attractive risk-reward ratio will be. For a complete pullback signal to be formed the market should be corrected to at least the last broken level. The market retracement should reach at least the last broken level (highlighted in green dotted lines) for a complete pullback signal to be formed.
Net position indicator decreased but didn’t reverse and large speculators support the trend. 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 market fluctuates around the last broken level. If the correction is deeper then a pullback signal will be formed on the Daily timeframe.
CFTC reports indicate that large speculators began to sell and herders began to buy franc. 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.
CHF/USD. Technical analysis and COT net position indicator.
British Pound (GBP/USD)
British pound remains in the strong medium-term bear trend and the impulse wave develops. A pullback buying opportunity will appear after the correction formation. Long positions will remain relevant until the market is above the support level, the lows of January 10 – 11.
CFTC reports indicate that large speculators go on buying Pound and hedgers are selling 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 timeframe. The correction came to an end last week and the impulse wave develops. USD/JPY short positions will remain relevant until the market is below the resistance level, the highs of January 17 – 19.
CFTC reports indicate that hedgers are selling Yen and the professionals’ opinion corresponds to the Daily trend direction again.
JPY/USD. Technical analysis and COT net position indicator.
WTI Crude Oil (CLH18)
The oil market remains in the strong uptrend and a pullback buying opportunity will appear after the correction completion. The lower the correction is completed the more attractive the signal will be. Bullish positions will remain relevant until the market is above the support level, the lows of January 5 – 8.
COT net position indicator increases along with the market. Professionals’ opinion corresponds to the Daily trend direction.
WTI Crude Oil (CLH18). Technical analysis and COT net position indicator.
Canadian Dollar(USD/CAD)
The Canadian dollar is in the correction from the price marks achieved last week. USD/CAD medium-term trend remains downward, short positions will remain relevant until the market is below the nearest resistance level on the Daily timeframe, the highs of January 10 – 11.
CFTC reports indicate that net position of large speculators hardly changed. Professionals’ opinion doesn’t correspond to the 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 gold market remains in the uptrend. The market has returned to the last broken level this week and it bounces off it now. Long positions will remain relevant until the market is above the support level, the lows of January 9 – 10.
Large speculators go on buying and hedgers are selling and the professionals’ opinion corresponds to the market technical picture.
Gold (GCG18). Technical analysis and COT net position indicator.
Silver (XAG/USD)
The silver market is in the flat. Before the fact of the nearest support or resistance level breakout new medium-term positions look unattractive. Large speculators go on buying and hedgers are selling and the probability of breaking through the sideways trend up is high.
Silver (SIH18). Technical analysis and COT net position indicator.
Australian Dollar (AUD/USD)
The Australian dollar remains in the uptrend and the impulse wave still develops. A pullback buying opportunity will appear after the correction formation. Long positions will remain relevant until the market is above the support level, the lows of January 9 – 10.
Large speculators are buying and hedgers are selling and the professionals’ opinion corresponds to the trend direction.
AUD/USD. Technical analysis and COT net position indicator.
New Zealand Dollar (NZD/USD)
The trend is bullish and the impulse wave develops. A pullback entry point will appear after the correction formation on the Daily timeframe. Long positions will remain relevant until the market is above the support level, the lows of December 20. CFTC reports indicate that professionals’ opinion corresponds to the market technical picture.
NZD/USD. Technical analysis and COT net position indicator.
Russian rouble (USD/RUB)
USD/RUB currency pair remains in the medium-term bear trend, the market is around the last broken level and the correction develops. A pullback entry point will appear after its completion. CFTC reports indicate that large speculators go on buying Rouble and hedgers are selling and the professionals’ opinion still corresponds to the technical picture.
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 timeframe and with potentially the most promising risk-reward ratio are silver, EUR/GBP, EUR/CHF, AUD/JPY.
In the near future EUR/USD, GBP/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 timeframe are likely to occur no earlier than a week.
Good luck in trading!