Market News & Analysis
Weekly COT Report: Trade Optimism Supports CAD and AUD
Matt Simpson November 11, 2019 7:42 AM
Read our guide on how to interpret the weekly COT report
As of Tuesday 5th November:
- Large speculators were net-long USD by $12.2 billion, down by $0.34 billion the prior week
- CAD traders were their most bullish in two years
- AUD traders were their least bearish since January
- AUD also saw the largest weekly change, with net-short exposure being reduced by 13.5k contracts
USD: DXY has rebounded from key support (which is heavily weighted to Euro), yet the broader measure of USD positioning is not confirming the move. This could suggest the rebound is simply corrective, so perhaps USD will break to new lows. Yet over the near-term, bullish momentum prevails and there are no clear signs of a top forming, so the bias for USD remains bullish.
CAD: It seems that trade deal optimism has overcome the dovish BOC meeting, with net-long exposure at its highest level in 2 years. Moreover, the move is fuelled by an increase in bullish bets and reduction of shorts, which is the backbone of a healthy move. Still, seeing as demand for USD remains, it could cap volatility for USD/CAD and make directional moves harder to come by.
AUD: Bears continue to flee whilst long interest perks up. Gross-long exposure is its highest level since June 2018 and gross shorts are at their lowest level since September. Like CAD, the Aussie is reaping the rewards of better US-China trade relations, which leaves it open to further upside should the phase one trade deal get signed.
As of Tuesday 5th November:
- Positioning on gold and silver was little changed.
- Net-long exposure on WTI rose to a 6-week high.
- Traders were their least bullish on Copper since June.
- Positioning on platinum and palladium continue to diverge, with the former seeing its bullish exposure at its highest level since September 2016 and the latter seeing bullish exposure fall to a 6-week low.
Gold: Bullish exposure nudged it way to a 6-week high. Yet we’ve seen a notable drop in gold prices since the gold report was compiled, some longs may have been squeezed along the way. Spot prices are teasing a break of 1459 and, given the bearish momentum, a breakdown appears likely. Yet the core view remains that this is still part of a much-needed correction from its highs, so the bias is bearish over a near-term horizon only. After which, we’ll look for evidence that the corrective low is in.
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.
Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.
Cryptocurrencies are not legal tender currency and trading of derivatives on Cryptocurrencies are currently not covered under any regulatory regime in Singapore. Consequently, investors should be aware they do not have protection under the Securities and Futures Act (Cap. 289). Please ensure that you are fully aware of the risks.