We make up a weekly medium-term trade list based on CFTC reports and technical analysis.
The overview provides a description of the technical condition of the market on the most popular financial instruments, as well as information on the large speculators’ actions according to the last COT reports and the previous period.
If you want to use CFTC reports in your trading practice, you should understand that for an objective assessment of the situation it’s not enough to know the data of the last report. The dynamic is more important, in other words, comparing the statistics of large speculators’ actions in the current period with the previous one, so we mention both values.
S&P 500 E-Mini Futures (ESH18)
The market remains in the bear trend and the correction wave develops. A pullback selling opportunity will appear after the correction completion on the daily time frame. Short positions will remain relevant until the market is below the nearest resistance level on the daily time frame, the highs of February 26 – 27.
COT indicator reversed. CFTC reports indicate that large speculators began to buy and the professionals’ opinion doesn’t correspond to the technical picture and it makes sense to reduce the position size when an entry point appears in the trend direction.
US Dollar Index (DXY)
The market remains in the uptrend. Another correction came to an end last week and the pullback buying opportunity was formed. Long positions will remain relevant until the market is above the nearest support level on the daily time frame, the lows of March 7 – 8.
CFTC reports indicate that large speculators go on buying dollar, hedgers are selling and the professionals’ opinion corresponds to the daily trend direction.
Euro (EUR/USD)
Euro remains in the bear trend. The correction came to an end last week and the pullback selling opportunity was formed. Short positions will remain relevant until the market is below the nearest resistance level on the daily time frame, the highs of March 7 – 8.
COT indicator decreased but didn’t reverse, large speculators go on buying Euro and the professionals’ opinion doesn’t correspond to the market technical picture and it makes sense to reduce the position size when an entry point appears in the trend direction.
Swiss Franc (USD/CHF)
USD/CHF currency pair remains in the uptrend. Another resistance level was broken on the daily time frame on Thursday, and the impulse wave develops. A pullback buying opportunity will appear after the correction formation on the daily time frame. CHF/USD long positions will remain relevant until the market is above the nearest support level on the daily time frame, the lows of March 2 – 5.
COT indicator increases, large speculators go on buying franc and the professionals’ opinion doesn’t correspond to the daily trend direction and it makes sense to reduce the position size when an entry point appears in the trend direction.
British Pound (GBP/USD)
British pound remains in the bear trend. The correction came to an end last week and the pullback selling opportunity was formed. Short positions will remain relevant until the market is below the nearest resistance level on the daily time frame, the highs of March 6 – 8.
COT indicator decreases along with the market. CFTC reports indicate that large speculators go on selling Pound and hedgers are buying and the professionals’ opinion corresponds to the daily trend direction.
Japanese Yen (USD/JPY)
USD/JPY currency pair remains in the bear trend on the daily time frame and the correction wave develops. A pullback selling opportunity will appear after the correction completion on the daily time frame. USD/JPY short positions will remain relevant until the market is below the nearest resistance level on the daily time frame, the highs of February 27 – 28.
COT indicator increases along with the market, large speculators are buying Yen and the professionals’ opinion corresponds to the daily trend direction.
WTI Crude Oil (CLK18)
The medium-term trend remains upward. The correction came to an end last week and the pullback buying opportunity was formed. Long positions will remain relevant until the market is above the nearest support level on the daily time frame, the lows of March 8 – 9.
COT net position indicator decreases. Large speculators are selling oil. Professionals’ opinion doesn’t correspond to the daily trend direction.
Canadian Dollar (USD/CAD)
USD/CAD medium-term trend remains upward and the correction wave develops. A pullback buying opportunity will appear after the correction completion on the daily time frame. Long positions will remain relevant until the market is above the nearest support level on the daily time frame, the lows of February 23 – 27.
COT indicator decreases. CFTC reports indicate that large speculators go on selling the Canadian dollar and hedgers are buying and the professionals’ opinion corresponds to the market technical picture.
Gold (XAU/USD)
The market is in the downtrend. The correction came to an end last week and the pullback selling opportunity was formed. Short positions will remain relevant until the market is below the nearest resistance level on the daily time frame, the highs of March 6 – 8.
COT indicator increases. Large speculators are buying gold and the professionals’ opinion doesn’t correspond to the technical picture and it makes sense to reduce the position size when an entry point appears in the trend direction.
Silver (XAG/USD)
The silver market remains in the medium-term bear trend and the correction wave develops on the daily time frame. Short positions will remain relevant until the price is below the resistance level, the highs of February 26 – 27. A pullback selling opportunity from this level will most likely appear within next week or it will be broken, the trend will change and a breakout buying opportunity will be formed.
COT indicator reversed. At the same time CFTC reports indicate that large speculators began to buy and hedgers are selling. Professionals’ opinion doesn’t correspond to the technical picture and it makes sense to reduce the position size when an entry point appears in the trend direction.
Australian Dollar (AUD/USD)
The support level was broken on the daily time frame on Friday, the trend is bullish now. A pullback buying opportunity will appear after the correction formation on the daily time frame. Long positions will remain relevant until the price is above the support level, the lows of March 8 – 9.
COT net position indicator decreases. Large speculators are selling, hedgers are buying. Professionals’ opinion doesn’t correspond to the daily trend direction and it makes sense to reduce the position size when an entry point appears in the trend direction.
New Zealand Dollar (NZD/USD)
NZD/USD currency pair remains in the medium-term uptrend. Another resistance level was broken on the daily time frame on Tuesday. The correction came to an end last week and the pullback buying opportunity was formed. Long positions will remain relevant until the market is above the support level, the lows of March 8 – 9.
COT indicator increased but didn’t reverse. CFTC reports indicate that large speculators go on selling and the professionals’ opinion doesn’t correspond to the technical picture now and it makes sense to reduce the position size when an entry point appears in the trend direction.
Russian Rouble (USD/RUB)
USD/RUB currency pair remains in the medium-term bear trend. The correction came to an end last week and the pullback selling opportunity was formed. Short positions will remain relevant until the market is below the nearest resistance level on the daily time frame, the highs of March 7 – 9.
COT indicator reversed and large speculators began to buy rouble and the professionals’ opinion corresponds to the daily trend direction.
Conclusions
In terms of medium-term trading, financial instruments with the correction close to completion on the daily time frame and with potentially the most promising risk-reward ratio are EUR/AUD, NZD/USD, dollar index.
In the near future USD/CAD, USD/CHF, USD/JPY can become noteworthy depending on the market correction depth.
Other financial instruments in the trade list may be also interesting, but in these markets pullback signals on the daily time frame are likely to occur no earlier than a week.