Weekly COT Report: AUD Longs Grow

Trading Themes: Despite initial weakness, USD gained in response to the election of Donald Trump as President. The prospect of increased consumer spending, lower corporate taxes and a more friendly business environment should support a positive shift in the economic outlook among firms. With risk sentiment responding positively, fed rate hike expectations for December remain intact.

EUR: EuroZone 3Q GDP & October CPI the key domestic data focus this week
GBP: Earnings and Employment the key data focus this week
JPY: 3Q GDP comes in much stronger than expected at 2.2% vs 0.8% expected
CHF: Buoyant risk appetite following US elections weighs on safe haven Franc
AUD: RBA Meeting Minutes the key domestic data focus this week
CAD: Continued scepticism surrounding OPEC Oil deal weighs on CAD

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 bearish, increased on the week
  • AUD bullish, increased on the week
  • CAD bearish, increased on the week

EURUSD Outlook – Bearish

The Euro fell in response to the US Presidential result as risk sentiment surged. On the release front, German Industrial Production disappointed the markets with a decline of 1.8 percent, well short of the forecast of -0.4 percent. While Germany’s surplus narrowed to EUR 21.3 billion, missing the forecast of EUR 23.4 billion

COT Indicators

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

LFOrder Flow Trader Bearish

eucot

 GBPUSD Outlook – Bearish

On the release front, German Industrial Production disappointed the markets with a decline of 1.8 percent, well short of the forecast of -0.4 percent. While Germany’s surplus narrowed to EUR 21.3 billion, missing the forecast of EUR 23.4 billion. Business sentiment recovered from post-referendum fall but remained relatively fragile alongside significant uncertainty around the longer-term outlook, Bank of England said. The central bank also commented that investment intentions indicate “broadly stable or slightly lower” spending in the coming year.

COT Indicators

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

LFOrder Flow Trader Bullish

gucot

USDJPY Outlook – Bullish

Survey by eco watchers showed that Japanese households and businesses were expecting economic momentum to pick up steam. The gauge of expectation in the next few months climbed from 48.5 in September to 49.0 in October. On a separate survey, households were the most optimistic about current economic situation since January. The index climbed from 44.8 in September to 46.2 in October despite broadly subdued growth.

COT Indicators

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

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 consolidates
  • Momentum buy signal ticks down

LFOrder Flow Trader Bullish

uc

AUDUSD – Outlook Bullish

The Aussie weakened sharply in response to the US election result suffering its biggest daily loss since June 24th. On the data front Australia’s Westpac consumer confidence index dropped to 101.3 in November (October: 102.4). The survey showed that households anticipated economic conditions to worsen in 5 years..

COT Indicators

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

LFOrder Flow Trader Bearish

 aucot

USDCAD OutlookBearish

Structural weaknesses are weighing heavily on Canada’s export sector but an improved mix of fiscal and monetary policy release some pressure off the central bank to stimulate demand, a senior Bank of Canada official said. The Canadian Dollar trimmed losses after hitting an eight-month low against the US dollar as Republican Donald Trump’s election to the White House raised worries about the outlook for Canada’s trade-intensive economy.

COT Indicators

  • Strength buy signal ticks up
  • Index active buy signal consolidates
  • Momentum signal turns flat, await new signal

LFOrder Flow Trader Bullish

ucadcot