Weekly COT Report: Swissy Longs Load Up

Trading Themes: The August Non-Farm Payrolls were a clear disappointment, printing just 151k on the month against expectations of 180k. The reading was a clear departure from recent positive momentum in the labour market indicator and alongside a weak wage-growth reading saw USD sold sharply in response. Despite the poor data however, the US Dollar recovered into the close retaining support from comments made by Fed chair Yellen who noted that recent economic data supports the case for a further rate hike this year. Whilst the number was indeed below expectations, Fed officials have previously noted that breakeven jobs growth is around 100k a month.  Not much in the way of key US data this week with ISM Non-Manufacturing the only noteworthy print.

EUR: ECB on deck this week – mixed expectations following positive data recently
GBP: Sterling supported by strong Manufacturing figures. Industrial & Manufacturing Production eyed this week
JPY: Traders await Q2 GDP and comments from BOJ’s Kuroda
CHF: Q2 GDP and August CPI on deck this week
AUD: An absence of domestic data turns focus to key China data over the week
CAD: BOC on deck this week, expected unchanged. Unemployment rate to follow

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

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

EURUSD Outlook – Bearish

Mixed data keeps the Euro pinned down ahead of the ECB rate decision this week with EuroZone PMI’s broadly positive but EuroZone Consumer Confidence significantly weaker than expected over August. EuroZone flash CPI estimate for August was below expectations at 0.2% vs 0.3%. Expectations are mixed ahead of the central bank meeting this week following the neutral tone of the bank’s statement in July.

COT Indicators

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

LFOrder Flow Trader Bearish

eucot

GBPUSD Outlook – Bearish

Sterling was supported by stronger Manufacturing data in August which warded off concerns that the British economy would suffer in the wake of Brexit. Looking ahead this week we have Industrial and Manufacturing Production data as well as Trade Balance data.

COT Indicators

  • Index sell signal consolidates
  • Strength sell signal ticks down
  • Momentum buy signal given

LFOrder Flow Trader Bullish

gucot

USDJPY Outlook – Bullish

Standard & Poor’s Ratings Services last week confirmed Japan’s A+/A-1 sovereign debt rating and maintained a stable outlook despite its heavy debt burden, saying political stability and stable financial system offset fiscal woes. Final 2Q GDP will be the key data focus this week alongside comments from BOJ’s Kuroda who speaks this week.

COT Indicators

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

LFOrder Flow Trader Bullish

ujcot

USDCHF Outlook – Bearish

The Swiss Franc has weakened over recent weeks amidst a broadly risk on tone. Focus this week will be on Q2 GDP as well as Inflation data for August. SNB easing expectations have been paired slightly in the wake of the currency’s decline over recent weeks though the central bank is expected to continue to warn against any further strength.

COT Indicators

  • Strength active buy signal ticks up
  • Index buy signal ticks down
  • Momentum sell signal given

LFOrder Flow Trader Bullish

uchfcot

AUDUSD – Outlook Bullish

Australia’s retail sales were flat in July, after climbing 0.1% MOM in June. Sales figure registered no growth for the first time in five months, signalling that consumer spending may have lost momentum at the turn of the third quarter. Attention this week will be on a raft of key China data.

COT Indicators

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

LFOrder Flow Trader Bullish

aucot

USDCAD OutlookBearish

The Canadian Dollar strengthened despite a slump in Oil prices last week as over-supply concerns once again exerted pressure on energy prices. The Bank of Canada meet this week for their monthly rate decision but are widely expected to keep rates on hold. Later in the week traders turn to the Unemployment rate.

COT Indicators

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

LFOrder Flow Trader Bullish

ucadcot