Weekly COT Report: Aussie Bears Increase Bets

Trading Themes: Dollar strengthened last week as bulls were once again engaged following Fed Chair Yellen’s Hawkish comments on Thursday evening. Bulls will be cautious into the new week with price failing to close above the weekly high leaving a bearish Daily pin bar at the near term resistance level. A key week of data for the US Dollar should provide plenty of volatility kicking off with PCE data on Monday ( a key gauge of inflation for the Fed) with Non Farm Payrolls the headline data set on Friday.

  • EUR likely volatile week ahead with month/quarter end ahead of Friday’s NFP release
  • GBP under renewed pressure, weak domestic data compounds global growth concerns, rate expectations rapidly repriced
  • JPY supported by a more hawkish Yellen, Tankan report eyed ahead of US ISM & NFP release
  • CHF in the Q3 Quarterly Bulletin, the Swiss National Bank reaffirmed its commitment to targeting a more reasonable CHF exchange rate
  • CAD Canadian GDP on watch this week, CAD supported while WTI holds $45.00
  • AUD remains in lower end of recent range, with no meaningful domestic data will take its lead from USD this week

Let’s take a look at what the latest COT data is showing us from a trend and net change week over week perspective…

  • EUR bearish, decreased on the week
  • GBP neutral, neutral on the week
  • CHF neutral, neutral on the week
  • JPY bearish,  decreased on the week
  • AUD bearish, increased on the week
  • CAD bearish, decreased on the week

EURUSD – Outlook Bearish

Ended the week in the middle of the range having recovered losses following hawkish comments from Fed chair Yellen. Although the ECB failed to deliver further stimulus at this month’s meeting, market participants are anticipating further easing in the very near future suggesting further downside. EZ CPI will be closely watched on Wednesday given the ECB’s concern over the inflationary environment.

COT Indicators

  • Strength active sell signal, ticks up from last weeks low
  • Index active buy signal, ticks up from last weeks low
  • Momentum active buy signal, fresh 2015 highs

LFOrder Flow Trader Bearish

eu1

GBPUSD – Outlook Bearish

The Dovish FOMC has seen an unwinding of BOE rate-hike expectations seeing Sterling broadly lower last week. Comments made by the BOE on Friday highlighted the increased risk from global elements seeing further GBP weakness. An absence of Tier One domestic data will leave GBP trading off Dollar flows amidst key US data.

COT Indicators

  • Strength active sell signal, ticks back up towards convergence
  • Index active buy signal, continues to tick up
  • Momentum active buy signal, ticks up

LFOrder Flow Trader Bearish

GU1

USDJPY – Outlook Bullish

CPI data came in better than expected last week though JPY upside was largely ignored in the wake of of Fed Chair Yellen’s Hawkish comments.The Yen continues to strengthen amid falling equity prices as investors repatriate capital. US data will be key to the Yen’s trading outlook this week.

COT Indicators

  • Strength active buy signal, ticks down
  • Index active sell signal, ticks down
  • Momentum active buy signal, ticks down

LFOrder Flow Trader Bearish

uj1

USDCHF – Outlook Bullish

In the Q3 Quarterly Bulletin, the Swiss National Bank reaffirmed its commitment to targeting a more reasonable CHF. CHF trades lower despite SNB downplaying the CHF, USDCHF testing .9800 resistance levels

COT Indicators

  • Strength active buy signal, ticks up from last weeks low
  • Index active buy signal, exit short positions and enter long positions at Friday close or better
  • Momentum active buy signal, ticks up

LFOrder Flow Trader Bullish

uchf1

AUDUSD – Outlook Bearish

The Australian Dollar came under sustained pressure last week amid stronger USD. Retail traders were heavily offside as AUD continued lower as commodity markets continued their decline. A monthly close below the 15 year ascending trend-line is now looking likely, signalling further downside.

COT Indicators

  • Strength active sell signal, ticks down
  • Index active sell signal, ticks down
  • Momentum active sell signal, ticks down

LFOrder Flow Trader Bearish

AU1

USDCAD Outlook – Bullish

Despite Oil remaining range bound last week, the Canadian Dollar weakened further with Canadian elections less than a month away prompting uncertainty. Yellen’s Hawkishness should spur further Canadian Dollar weakness from here. Canadian GDP midweek will be closely watched by traders looking to anticipate the BOC’s next move.

COT Indicators

  • Strength active buy signal, ticks down
  • Index active  buy signal, continues to tick down
  • Momentum sell signal, ticks down

ucad1

Posted in Trader Lifestyle, tagged with on