Special Thread: COT Data Analysis & Trading Signals

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Based on Commitments of Traders (COT) data as of January 30, 2024, here is an analysis for the AUDUSD pair:

1. Non-Commercial Long: 36,956 contracts
2. Non-Commercial Short: 95,251 contracts
3. Changes in Non-Commercial Long: -5,897 contracts
4. Changes in Non-Commercial Short: -1,722 contracts
5. Percent of Open Interest represented by Non-Commercial Long: 22.3%
6. Percent of Open Interest represented by Non-Commercial Short: 57.5%

US Dollar (USD):

1. Non-Commercial Long: 200,360 contracts
2. Non-Commercial Short: 111,589 contracts
3. Changes in Non-Commercial Long: 5,170 contracts
4. Changes in Non-Commercial Short: 4,723 contracts
5. Percent of Open Interest represented by Non-Commercial Long: 27.6%
6. Percent of Open Interest represented by Non-Commercial Short: 15.3%

Net Bias for AUDUSD: The net bias for AUDUSD is bearish. This is inferred from the higher percentage of open interest represented by non-commercial short positions in AUD (57.5%) compared to the percentage of open interest represented by non-commercial long positions in USD (27.6%).

Key Findings from Non-Commercial COT Data:

1. There is a strong bearish sentiment among non-commercial traders for AUD, with a significant number of short positions.
2. There is a moderate bullish sentiment among non-commercial traders for USD, with a higher number of long positions compared to short positions.
3. There has been a decrease in long positions for AUD and an increase in long positions for USD, further supporting the bearish bias for AUDUSD.

Implications for AUDUSD:

1. The bearish sentiment for AUD and bullish sentiment for USD among non-commercial traders could potentially lead to a downward trend in the AUDUSD pair.
2. Traders should monitor changes in non-commercial positions, as these could signal shifts in market sentiment.

Recommendations:

1. Traders might consider entering short positions in AUDUSD, given the current market sentiment.
2. However, it’s important to incorporate other technical and fundamental analysis into your trading decisions and always implement sound risk management strategies.

Non-Commercial COT Analysis: February 13, 2024

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1. Net Position: Calculated by subtracting Non-Commercial Short from Non-Commercial Long. Positive = net long, negative = net short.
2. Change in Position: Calculated by subtracting the previous week's position data from the current week's. Positive = increased, negative = decreased.
3. Open Interest Trend: A qualitative assessment based on whether the total open contracts (not shown in your data) have generally increased or decreased over the week.

Important Notes

1. Open Interest: Ideally, the most accurate analysis includes changes in total open interest alongside these COT numbers. If you can provide total open interest, I can incorporate this for richer insights.

How to Analyze this data for any pair using this table:

1. Identify Strongest Bias: Which currency in the pair has the more definitive net position (larger number of contracts net Long or Short)? This is likely the driver.
2. Changes Matter: Is the dominant currency strengthening or weakening its bias (significantly increasing or decreasing positions)?
3. Confirm or Contradict: Does the other currency confirm the trend (e.g., both short), or potentially counteract it (e.g., one long, one short)?

Example: Looking at the table for NZDCAD

1. NZD shows a positive net long position AND is strengthening that position.
2. CAD shows a negative net short position and is weakening.
3. Interpretation: This suggests NZDCAD could move upwards,

1. Strong Biases: Look for currencies with strong net long/short positions. These indicate clear speculative sentiment that could drive price movement within a pair.
   1. From the table: GBP (strong Long), JPY (strong Short)

   
   

2. Significant Shifts: Focus on currencies where the "Change in Position" indicates a substantial increase or decrease in commitment by non-commercial traders. This shows changing sentiment possibly due to new information
   1. From the table: GBP (+16,097), JPY (-27,306)

   
   

3. Converging or Diverging Trends: Pairs with opposing biases between the two currencies often offer the highest trading potential.
   1. Potential Pairs (from the table): GBPJPY, GBPAUD, GBPCAD, NZDJPY

   
   

Non-Commercial COT Analysis: GBPJPY - February 13, 2024

1. GBPJPY: Exhibits a Bullish net bias based on Non-Commercial COT positioning. This represents a shift from the previous week’s sentiment.

Key Individual Currency Sentiment:

1. GBP: Non-commercial traders are predominantly Bullish. Key Data:
   1. Net Position: Long bias
   2. Changes in Positioning: Increase in Long contracts by 6,609 and decrease in Short contracts by 9,388 compared to previous week
   3. Open Interest Trends: Long positions make up 45.5% of open interest, while Short positions make up 20.1%

2. JPY: Non-commercial traders are predominantly Bearish. Key Data:
   1. Net Position: Short bias
   2. Changes in Positioning: Increase in both Long and Short contracts by 2,908 and 30,214 respectively compared to previous week
   3. Open Interest Trends: Short positions make up 55.8% of open interest, while Long positions make up 19.2%

Implications for GBPJPY:

1. Potential Direction: The combined sentiment from individual currencies suggests GBPJPY may move in an upward direction.

Important Reminders:

1. COT data reveals speculative sentiment but is not a guarantee of market movement.
2. Changes in sentiment among non-commercial traders can shift quickly.
3. Integrate COT data with technical and fundamental analysis for a comprehensive view.

Additional Considerations (Optional):

1. Correlations: Monitor related currency pairs (e.g., EURJPY) for confirmation signals.
2. Commercial Positions: Look for major discrepancies between commercial and non-commercial bias, as they could signal longer-term shifts.

Non-Commercial COT Analysis: USDJPY - February 13, 2024

1. USDJPY: Exhibits a Bearish net bias based on Non-Commercial COT positioning. This represents a continuation of the previous week’s sentiment.

Key Individual Currency Sentiment:

1. USD: Examine sentiment and open interest changes:
   1. Position: 65.5% of non-commercial traders hold long positions, indicating a bullish bias.
   2. Change: Change in long positions compared to the prior week indicates strengthening sentiment.
   3. Open Interest Trends: Increasing OI levels signal growing conviction.

2. JPY: Examine sentiment and open interest changes:
   1. Position: 19.2% of non-commercial traders hold long positions, indicating a bearish bias.
   2. Change: Change in long positions compared to the prior week indicates weakening sentiment.
   3. Open Interest Trends: Decreasing OI levels signal diminishing conviction.

Implications for USDJPY:

1. Potential Direction: The combined sentiment from individual currencies suggests USDJPY may move in a bearish direction.
2. Volatility: Potential for downward spikes in USDJPY due to speculative positioning reflected in COT data.

Important Reminders:

1. COT data reveals speculative sentiment but is not a guarantee of market movement.
2. Changes in sentiment among non-commercial traders can shift quickly.
3. Integrate COT data with technical and fundamental analysis for a comprehensive view.

Additional Considerations (Optional):

1. Correlations: Monitor related currency pairs (e.g., EURJPY) for confirmation signals.
2. Commercial Positions: Look for major discrepancies between commercial and non-commercial bias, as they could signal longer-term shifts.

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Non-Commercial COT Analysis: AUDNZD - February 13, 2024

1. AUDNZD: Exhibits a Bearish net bias based on Non-Commercial COT positioning. This represents a continuation of the previous week’s sentiment.

Key Individual Currency Sentiment:

1. AUD: Examine sentiment and open interest changes:
   1. Position: 23.8% of non-commercial traders hold long positions, indicating a bearish bias.
   2. Change: Decrease in long positions compared to the prior week indicates weakening sentiment.
   3. Open Interest Trends: Decreasing OI levels signal diminishing conviction.

2. NZD: Examine sentiment and open interest changes:
   1. Position: 46.9% of non-commercial traders hold long positions, indicating a bullish bias.
   2. Change: Increase in long positions compared to the prior week indicates strengthening sentiment.
   3. Open Interest Trends: Increasing OI levels signal growing conviction.

Implications for AUDNZD:

1. Potential Direction: The combined sentiment from individual currencies suggests AUDNZD may move in a bearish direction.
2. Volatility: Potential for downward spikes in AUDNZD due to speculative positioning reflected in COT data.

Important Reminders:

1. COT data reveals speculative sentiment but is not a guarantee of market movement.
2. Changes in sentiment among non-commercial traders can shift quickly.
3. Integrate COT data with technical and fundamental analysis for a comprehensive view.

Additional Considerations (Optional):

1. Correlations: Monitor related currency pairs (e.g., AUDUSD) for confirmation signals.
2. Commercial Positions: Look for major discrepancies between commercial and non-commercial bias, as they could signal longer-term shifts.

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Non-Commercial COT Analysis: USDCHF - February 20, 2024

1. USDCHF: Exhibits a Bearish net bias based on Non-Commercial COT positioning. This represents a continuation of the previous week’s sentiment.

Key Individual Currency Sentiment:

1. USD: Examine sentiment and open interest changes:
   1. Position: 62.5% of non-commercial traders hold long positions, indicating a bullish bias.
   2. Change: Change in long positions compared to the prior week indicates weakening sentiment.
   3. Open Interest Trends: Decreasing OI levels signal diminishing conviction.

   
   

2. CHF: Examine sentiment and open interest changes:
   1. Position: 21.7% of non-commercial traders hold long positions, indicating a bearish bias.
   2. Change: Change in short positions compared to the prior week indicates strengthening sentiment.
   3. Open Interest Trends: Increasing OI levels signal growing conviction.

   
   

Implications for USDCHF:

1. Potential Direction: The combined sentiment from individual currencies suggests USDCHF may move in a bearish direction.
2. Volatility: Potential for downward spikes in USDCHF due to speculative positioning reflected in COT data.

Important Reminders:

1. COT data reveals speculative sentiment but is not a guarantee of market movement.
2. Integrate COT data with technical and fundamental analysis for a comprehensive view.

Additional Considerations (Optional):

1. Correlations: Monitor related currency pairs (e.g., EURUSD) for confirmation signals.

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Non-Commercial COT Analysis: EURAUD – February 20, 2024

1. The EURAUD pair exhibits a bullish bias based on current Non-Commercial COT data, continuing the sentiment observed in the previous week.

Individual Currency Analysis:

1. EUR:
   1. Net Position: 29.5% long (bullish) – a significant increase from the previous week.
   2. Open Interest: Rising, indicating strengthening bullish conviction.

2. AUD:
   1. Net Position: 63.7% short (bearish) – a significant increase from the previous week.
   2. Open Interest: Rising, indicating strengthening bearish conviction.

Implications for EURAUD:

1. The combination of bullish EUR and bearish AUD sentiment reinforces the overall bullish outlook for EURAUD.
2. Potential Trend: Upward price movement is likely.
3. Market Volatility: Increased speculative positioning suggests the potential for volatility and upward price surges.

Important Considerations:

1. Market sentiment can change rapidly. COT analysis should be used in conjunction with other technical and fundamental indicators.

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Non-Commercial COT Analysis: AUDNZD - February 20, 2024

1. AUD:
   1. Net Position: 23.9% of non-commercial traders hold net long positions, indicating a bearish bias. This is stronger than the previous week.
   2. Change in Position: Net positions have increased significantly, suggesting strengthening sentiment.
   3. Open Interest Trends: Overall open interest is increasing, signaling growing conviction.

2. NZD:
   1. Net Position: 48.2% of non-commercial traders hold net long positions, indicating a bullish bias. This is stronger than the previous week.
   2. Change in Position: Net positions have increased significantly, suggesting strengthening sentiment.
   3. Open Interest Trends: Overall open interest is increasing, signaling growing conviction.

Implications for AUDNZD:

1. Bias: Based on the analysis, the NZD has a stronger bias within the pair and they diverge. The pair’s bias is calculated as (Bullish) * (+1) = Positive/Bullish Bias.
2. Potential Direction: The combined sentiment from individual currencies suggests AUDNZD may move in a bearish direction.
3. Volatility: Potential for downward spikes in AUDNZD due to speculative positioning reflected in COT data.

Important Reminders:

1. COT data reveals speculative sentiment but isn’t a guarantee of market movement.
2. Integrate COT data with technical and fundamental analysis for a comprehensive view.

Additional Considerations (Optional):

1. Correlations: Monitor related currency pairs (e.g., AUDUSD) for confirmation signals.

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Non-Commercial COT Analysis: USDCHF (February 20, 2024)

1. Net Bias: Bearish. Non-commercial traders have shifted sentiment in favor of short positions.
2. Key Sentiment:
   1. CHF: Strengthening bearish sentiment, increased short positions, rising open interest (OI).
   2. USD: Weakening bullish sentiment, decreased long positions, declining OI.

Implications:

1. Potential downward pressure on USDCHF. Widening divergence in sentiment favors CHF strength against USD.
2. Increased volatility likely. Divergence signals potential for significant price movement.

Important Considerations:

1. COT reflects sentiment, not guaranteed direction. Use this data in conjunction with technical and fundamental analysis.

Conclusion:
The current COT data for USDCHF suggests a potential bearish trend. Continued monitoring of sentiment shifts is crucial for informed trading decisions.

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Non-Commercial COT Analysis: USDCAD - Week Ending February 20, 2024

1. USDCAD: Leans bearish based on non-commercial trader positioning in the COT report for the week ending February 20, 2024. This is a shift from the bullish sentiment observed in the previous week.

Key Individual Currency Sentiment:

1. Canadian Dollar (CAD):
   1. Net Short: 54.1% of non-commercial traders hold short positions, indicating a bearish bias.
   2. Strengthening Bearish Sentiment: The change in short positions compared to the prior week suggests this bias is strengthening.
   3. Growing Conviction: Increasing open interest indicates growing conviction among these traders.

2. US Dollar (USD):
   1. Net Long: 37.5% of non-commercial traders hold long positions, indicating a bullish bias.
   2. Weakening Bullish Sentiment: The change in long positions compared to the prior week suggests this bias is weakening.
   3. Diminishing Conviction: Decreasing open interest indicates diminishing conviction among these traders.

Implications for USDCAD:

1. Potential Direction: The combined sentiment from individual currencies suggests USDCAD may move in a bearish direction in the near term.
2. Volatility: The COT data suggests potential for downward spikes in USDCAD due to speculative positioning.

Important Reminders:

1. COT data reflects speculative sentiment, not guaranteed market movement.
2. Sentiment among non-commercial traders can shift quickly.
3. Use COT data in conjunction with other analysis methods for a comprehensive view.

Additional Considerations (Optional):

1. Monitor related currency pairs (e.g., EURUSD) for confirmation signals.
2. Look for major discrepancies between commercial and non-commercial bias, as they could signal longer-term shifts.

Source: CFTC Commitments of Traders Reports (February 20, 2024)
Note: This analysis is based on publicly available information and should not be considered financial advice.

=USDCAD - M30=
My entry Price: 1.35470

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