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Large Currency Speculators trimmed US Dollar bullish bets. GBP & JPY bets drop for 4th week

July 29, 2013 in Forex Articles

By CountingPips.com


cot-values



The weekly Commitments of Traders (COT) report, released on Friday by the Commodity Futures Trading Commission (CFTC), showed that large futures traders and currency speculators cut back on their total bullish bets of the US dollar last week after increasing their positions over the previous three weeks.

Non-commercial large futures traders, including hedge funds and large International Monetary Market speculators, pared their overall US dollar long positions to a total of $28.69 billion as of Tuesday July 23rd. This was a decrease from the total long position of $29.61 billion that was registered on July 16th, according to position calculations by Reuters that derives this total by the amount of US dollar positions against the combined positions of euro, British pound, Japanese yen, Australian dollar, Canadian dollar and the Swiss franc.

COT explanation: The weekly cot report summarizes the total trader positions for open contracts in the futures trading markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators).

Individual Currencies Large Speculators Positions in Futures:

The large currency speculator net positions for each of the individual major currencies directly against the US Dollar last week showed weekly increases for the euro, Australian dollar, New Zealand dollar, Canadian dollar and the Mexican peso while the British pound sterling, Japanese yen and the Swiss franc all had a declining number of large speculator positions for the week.

Notable changes: Euro net speculative contracts rose modestly for the second straight week while the British pound and Japanese yen net positions both fell for the fourth consecutive week and the Swiss franc net positions dropped for the fifth week.

Individual Currency Charts:


EuroFX:

eur

Last Six Weeks of Large Trader Positions: EuroFX

Date Lg Trader Net Change
06/18/2013 20030 27563
06/25/2013 17357 -2673
07/02/2013 -16090 -33447
07/09/2013 -40900 -24810
07/16/2013 -37165 3735
07/23/2013 -27900 9265



British Pound Sterling:

gbp

Last Six Weeks of Large Trader Positions: Pound Sterling

Date Lg Trader Net Change
06/18/2013 -20406 33281
06/25/2013 -19429 977
07/02/2013 -31324 -11895
07/09/2013 -34259 -2935
07/16/2013 -37446 -3187
07/23/2013 -49653 -12207



Japanese Yen:

jpy

Last Six Weeks of Large Trader Positions: Yen

Date Lg Trader Net Change
06/18/2013 -61890 11016
06/25/2013 -61462 428
07/02/2013 -70736 -9274
07/09/2013 -80305 -9569
07/16/2013 -85762 -5457
07/23/2013 -87496 -1734



Swiss Franc:

chf

Last Six Weeks of Large Trader Positions: Franc

date Lg Trader Net Change Weekly
06/18/2013 5791 26529
06/25/2013 2464 -3327
07/02/2013 -116 -2580
07/09/2013 -1776 -1660
07/16/2013 -4969 -3193
07/23/2013 -5433 -464



Canadian Dollar:

cad

Last Six Weeks of Large Trader Positions: CAD

date Lg Trader Net Change Weekly
06/18/2013 -26087 9820
06/25/2013 -10638 15449
07/02/2013 -16250 -5612
07/09/2013 -23829 -7579
07/16/2013 -20043 3786
07/23/2013 -16758 3285



Australian Dollar:

aud

Last Six Weeks of Large Trader Positions: AUD

date Lg Trader Net Change Weekly
06/18/2013 -63521 -244
06/25/2013 -61644 1877
07/02/2013 -70515 -8871
07/09/2013 -63255 7260
07/16/2013 -70686 -7431
07/23/2013 -63982 6704



New Zealand Dollar:

nzd

Last Six Weeks of Large Trader Positions: NZD

date Lg Trader Net Change Weekly
06/18/2013 2126 -527
06/25/2013 -711 -2837
07/02/2013 -1174 -463
07/09/2013 -1008 166
07/16/2013 -2744 -1736
07/23/2013 -1846 898



Mexican Peso:

mxn

Last Six Weeks of Large Trader Positions: MXN

date Lg Trader Net Change Weekly
06/18/2013 20949 -42825
06/25/2013 4981 -15968
07/02/2013 2847 -2134
07/09/2013 8035 5188
07/16/2013 11366 3331
07/23/2013 19799 8433

The Commitment of Traders report is published every Friday by the Commodity Futures Trading Commission (CFTC) and shows futures positions data that was reported as of the previous Tuesday (3 days behind).

Each currency contract is a quote for that currency directly against the U.S. dollar, a net short amount of contracts means that more speculators are betting that currency to fall against the dollar and a net long position expect that currency to rise versus the dollar.

(The graphs overlay the forex spot closing price of each Tuesday when COT trader positions are reported for each corresponding spot currency pair.)

See more information and explanation on the weekly COT report from the CFTC website.

 

Article by CountingPips.com

 

Pivot Point Trading

July 28, 2013 in Forex Strategies

Pivot point trading is one of the forex trading strategies commonly used by forex traders. In pivot point trading the moves from the previous days are calculated and forex trades are entered into when the forex market reaches a support or resistance line that is in the pivot point – of course, with the assurance that the OB/OS indicator supports the move. The support and resistance lines are already placed before you trade and then you wait until the entry points that have been set are hit.

Pivot point trading is quite popular among forex traders, partly because it is such an established trading strategy. In fact, it was one of the most used trading methods before the advent of computers. Pivot point calculations were used to look for hidden support and resistance levels. With the help of computers it is now easier to calculate pivot points and do it far in advance.

Pivot Points Explained

The forex market can only move between an x and y axis, that is, it can move up and down or sideways. Prices may go up or down but at some point it will always go back to a point of equilibrium – a state in which the market is balanced. This happens over and over again. The pivot points can help in determining the amount of stretch the market can take before it rebounds to its state of equilibrium.

Calculating pivot points entails choosing the time frame for the calculations. In this discussion, let us use the 24 hour time frame. Pivot points are determined by calculating the open, high, low, and close prices of the previous day’s trading. Calculations can be done automatically using the various pivot point calculators that’s available online. The time frame you use will have a direct bearing on the amount of time you also need to invest in your trade. The longer the time frame you use the longer you also need to stay in the market to wait for that entry point you identified.

If you are looking for a truly objective indicator then pivot points are for you. Since the basis for pivot points is based on pure mathematics no subjectivity can ever enter the picture unlike subjective indicators like Elliot waves or Fibonacci retracements where things depend on the individual interpretation of data.

Entry and exit points explained

Pivot points provide traders with exact entry and exit points, which is quite invaluable since it removes the speculation and uncertainty of when to enter and exit the market, which is what you experience with other indicators wherein you may enter during the middle of a run or when it’s about to rebound and move towards the opposite direction. With pivot points, if the price begins to stall at a pivot point level then it’s a sign that you need to either get in (if you haven’t entered yet) or get out (if you’re already committed to the right direction with an open trade).

When trading over the course of the day, it should be contained within the first support and resistance levels as the floor traders still make their markets. Upon the breaching of these levels, other traders will start getting attracted to the market. Breaching the second level will now attract longer term traders.

There is a lot of value in knowing where floor traders expect the support or resistance. It becomes even more important if there are no external influence on the market. If there are no crucial market or economic news that happened within the span of yesterday’s trading and before the opening in today’s market, floor traders and market makers will usually move the market between the pivot point and the first support and resistance. If these levels are penetrated then the market will test the next support or resistance levels.

These are the very basics of pivot point trading. While there are more nuances to this trading method you can start using this basic method to get comfortable with this kind of forex trading strategy.

 

About The Author

Mario Singh is the owner of popular forex trading site Askmariosingh.com

GBP/USD’s Struggle Against 200-Day Moving Average

July 28, 2013 in Chart Alert

For GBP/USD the resistances of the 61.8% retracement and 200-day moving average were joining the forces as we had mentioned in this chart alert during the last weekend.

The pair ultimately broke both these resistances by moving as high as 1.5435 but the current price action is still struggling around these resistances. Even if a decisive break of these takes place, the pair seems to have resistances at each step.

Let the following chart talk about the same instead of the words:

GBP/USD and the resistances at each step

GBP/USD struggling against 200-day moving average

You may also like to check GBP/USD weekly predictions and GBP/USD daily analysis.

Please do leave your comments in the comment box below to discuss the price action further.

EUR/JPY In Support Zone – Forex Chart Alert

July 27, 2013 in Chart Alert

On one hand the strong fall of EUR/JPY to 130.08 suggests further consolidation bit on the other hand the price action is in a support zone. These support zone combined with the psychological support of 130.00 may prove to be strong and hence a cautious approach of waiting and watching is required till a break does not take place.

Instead of using words, let the charts talk about these support and resistance levels.

EUR/JPY and 200-period SMA on 4-hourly chart

EUR/JPY - 200 period support on 4 hourly chart

EUR/JPY and short-term trend line support (daily chart)

EUR/JPY near trend line support

EUR/JPY and 22-week EMA support (weekly chart)

EURJPY- support near 22 week EMA

You may also like to check the EUR/JPY weekly predictions which are updated weekly and the EUR/JPY daily analysis.

Do leave your comments to discuss it further in the comments box. below.

USD/JPY’s Bearish Break – Forex Chart Alert

July 27, 2013 in Chart Alert

USD/JPY, once again, failed to sustain over 100.00 and fell. Not only that but it broke below 98.23 and that casts some bearish shadows for short-term. The questions now are, will the consolidation see some more depths or not and if yes then to what levels? Let’s just see what do the charts say about it.

USD/JPY and 200 day moving average

USDJPY and 200 day moving average

Longer-term view against 200-day moving average

USDJPY with 200 day SMA - longer term

USD/JPY and retracement levels (weekly chart)

USDJPY retracement levels

Expected Resistances (4-hourly chart)

USDJPY- expected resistances

You may also like to check the USD/JPY predictions which are updated weekly and the USD/JPY daily analysis.

Do leave your comments to discuss it further in the comments box below.

GBPUSD: Maintains Bullish Momentum, Targets Higher Prices

July 26, 2013 in Forex Analysis

GBPUSD: With GBP returning above the 1.5304 level, further upside offensive is likely towards the 1.5450 level. Further out, resistance stands at the 1.5500 level where a violation will aim at the 1.5550 level. Its daily RSI is bullish and pointing higher suggesting further upside. On the downside, support lies at the 1.5304 level where a reversal of roles as support is expected to occur and turn it higher. But if this fails, further decline could follow towards the 1.5250 level with a turn below here aiming at the 1.5200 level and then 1.5027. On the whole, GBP continues to retain its upside bias.

Is the FTSE 100 running a little ahead of itself above 6600?

July 26, 2013 in UK

 

Equity prices are beginning to look toppy again, the FTSE 100 has been struggling to make much headway above 6600 this week. Results in the UK have been generally good but a lot of this has been factored into prices– this week ARM holdings had results which the market initially liked but with the shares on a p/e ratio of 70 the share price has since weakened as the share price factors in a lot of good news. Similarly, yesterday aero-engine maker Rolls Royce announced good results but with the shares having had a spectacular run over the last few years, the share price seems rather high above £12 a share.  Similarly, EasyJet had much better than expected results yesterday and the shares rose sharply  on the back of the excellent results.  With the share price so high after the 140%  rise in the last year, the share price has come into profit-taking today.  The financials have had a great run in the last few weeks with Lloyds market capitalisation currently £47 billion. The shares are up more than 35% since the start of the year. Results due next week will need to be better than expected for the shares to maintain their current share price but obviously those that bought before 2007 will disagree when the share price was many times above the current level. Similarly Royal Bank of Scotland have had a very strong run since the first week of July rising from 270p to 340p yesterday – a rise of 25% within a month! Have fundamentals changed that much to justify a rise of more than a quarter in such a short period of time?

 

With interest rates so low and other asset classes giving very low yields,  UK equities are still sought but some share prices seem to be running a little ahead of themselves. There are still some FTSE 100 companies that yield above 5% (Astra Zeneca, Aviva and National Grid for example) and those may still be sought for their income generation. The London market has had a tremendous run since the end of the May with the FTSE 100 rising from  6000  to the current 6600 level. Over confidence and over exuberance may spoil the party in the short-term, be careful, share selection is going to prove more difficult in the weeks ahead with some share prices discounting a lot of good news!

Sterling’s recent run against the US Dollar over?

July 25, 2013 in Forex Articles

Britain’s recovery picked up  in the second quarter, official figures have confirmed, with GDP expanding by 0.6% which was the expected figure, so no surprises but the growth rate is double the previous quarter figure. The 0.6% rate of growth was the figure predicted by economists. There have been signs of a pickup in retail sales but margins have been hit. The Office for National Statistics said that all sectors of the economy saw growth between April and June. Both industrial production, and the key services sector, expanded by 0.6%, the ONS said, with construction – which has been a heavy drag on the economy in recent quarters – picking up by a healthier than expected 0.9% helped by incentives from the UK government.

Sterling fell back sharply against the US dollar after the release of the figures, having been above 1.5380 before the GDP announcement the pound quickly fell to 1.5330 and is currently at 1.5320. Sterling had had a very strong run from 1.48 USD to close to 1.54 USD in the last three weeks. Today’s confirmation of the GDP figures from the UK, although good that it is the first time since 2011 that the UK has seen back-to-back quarterly increases, after a 0.3 per cent rise at the beginning of this year. The figures are still on the low side especially when compared with U.S GDP figures. The decline in Sterling soon after the announcement of the figures will probably continue and it would not be a surprise if the 1.50 USD level is breached possibly within the next couple of weeks. The new Bank of England governor Mark Carney is known to want Sterling to depreciate and want the UK to become more of an export oriented economy and boost exports.

GBP and EURO looking overvalued against the US Dollar

July 23, 2013 in Forex Articles

Last week’s Bank of England minutes pushed Sterling sharply higher against the US dollar  as The Bank of England’s monetary policy committee voted 9-0 to leave interest rates and quantitative easing unchanged.

This sharp rally in Sterling should be used as an opportunity to short the pound again against the US dollar. Sterling has continued to make headway and earlier today was trading at 1.5380, it has since fallen back a little and currently trading at 1.5370. This rally in Sterling from 1.48 USD in the first week of July to the current level is a  good entry level to open short positions in the pound. GDP figures out on Thursday will be influential in determining Sterling in the short-term but a lot of good news for Sterling has already been factored in and there is plenty of room for disappointment. The 1.50 USD level should be broken before the month is out again.

The Euro has had a strong rally against the US dollar in the last couple of weeks rising from 1.28 USD to the current level of 1.32 USD. This rally in the Euro should be an opportunity to go short again. Europe is still in a mess and the rally in the Euro is baffling. In recent week’s Portugal has struggled  to come up with a plan to cut its deficit and could need another bailout. Spain is still in recession and uncertainty in the political situation in Italy is of concern once again. Elections in the powerhouse of Europe – Germany in the next few weeks will also start to cause anxiety in the markets. It should not be too long before the Euro is trading below 1.30 USD again.

The Eurozone crisis could reignite over the summer as political clashes and a weak commitment to austerity could scare the markets and the US dollar will be sought which no doubt will not only weaken the Euro but also Sterling. Continue to buy the USD on any weakness and sell the British pound and Euro against the greenback.

GBP/USD At 200-Day Moving Average

July 22, 2013 in Chart Alert

GBP/USD touched 1.5384 and found some resistance to get back to 1.5360. Please note that the pair had almost touched the 200-day moving average by doing so.

GBP/USD finding resistance near 200-day moving average 

GBPUSD finding resistance at 200 day moving average

Please check this previous chart alert where we had mentioned that the approaching resistance level may prove to be quite strong because of the following factors:

1) 200-day moving average at 1.5391

2) 61.8% retracement of the downward move from 1.5751 to 1.4813 at 1.5392.

GBP/USD near the combined resistances

GBP/USD near the combined resistance

Once again the longer-term view of GBPUSD with 200-day SMA

GBP/USD and 200 day moving average

What if these resistance do not hold

Please check the above mentioned chart alert which indicates the  resistances which are beyond the current ones, in case these resistances do not hold.

You may also like to check the weekly GBP/USD predictions and the daily analysis of GBP/USD.

Large Currency Traders raised US Dollar futures bets for 3rd Week

July 21, 2013 in Forex Analysis

By CountingPips.com


cot-values



The weekly Commitments of Traders (COT) report, released on Friday by the Commodity Futures Trading Commission (CFTC), showed that large futures traders and currency speculators raised their total bullish bets of the US dollar last week for a third straight week.

Non-commercial large futures traders, including hedge funds and large International Monetary Market speculators, increased their overall US dollar long positions to a total of $29.61 billion as of Tuesday July 16th. This was a rise from the total long position of $27.94 billion that was registered on July 9th, according to position calculations by Reuters that derives this total by the amount of US dollar positions against the combined positions of euro, British pound, Japanese yen, Australian dollar, Canadian dollar and the Swiss franc.

USD net long positions hit their highest level since June 4th when bullish positions totaled $39.12 billion, according to Reuters data calculations.

COT explanation: The weekly cot report summarizes the total trader positions for open contracts in the futures trading markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators).

Individual Currencies Large Speculators Positions in Futures:

The large currency speculator net positions for each of the individual major currencies last week showed weekly increases for the euro, Canadian dollar and the Mexican peso while the Australian dollar, British pound sterling, Japanese yen, Swiss franc and the New Zealand dollar all had a declining number of large speculator positions for the week.

Notable changes: Euro spec contracts improved after falling for three straight weeks. The British pound and Japanese yen net positions declined for the third consecutive week while Swiss franc net positions dropped for a fourth week.

Individual Currency Charts:


EuroFX:

eurofx

Last Six Weeks of Large Trader Positions: EuroFX

Date Lg Trader Net Change
06/11/2013 -7533 44088
06/18/2013 20030 27563
06/25/2013 17357 -2673
07/02/2013 -16090 -33447
07/09/2013 -40900 -24810
07/16/2013 -37165 3735



British Pound Sterling:

gbp

Last Six Weeks of Large Trader Positions: Pound Sterling

Date Lg Trader Net Change
06/11/2013 -53687 24051
06/18/2013 -20406 33281
06/25/2013 -19429 977
07/02/2013 -31324 -11895
07/09/2013 -34259 -2935
07/16/2013 -37446 -3187



Japanese Yen:

jpy

Last Six Weeks of Large Trader Positions: Yen

Date Lg Trader Net Change
06/11/2013 -72906 9838
06/18/2013 -61890 11016
06/25/2013 -61462 428
07/02/2013 -70736 -9274
07/09/2013 -80305 -9569
07/16/2013 -85762 -5457



Swiss Franc:

chf

Last Six Weeks of Large Trader Positions: Franc

date Lg Trader Net Change Weekly
06/11/2013 -20738 5065
06/18/2013 5791 26529
06/25/2013 2464 -3327
07/02/2013 -116 -2580
07/09/2013 -1776 -1660
07/16/2013 -4969 -3193



Canadian Dollar:

cad

Last Six Weeks of Large Trader Positions: CAD

date Lg Trader Net Change Weekly
06/11/2013 -35907 3869
06/18/2013 -26087 9820
06/25/2013 -10638 15449
07/02/2013 -16250 -5612
07/09/2013 -23829 -7579
07/16/2013 -20043 3786



Australian Dollar:

aud

Last Six Weeks of Large Trader Positions: AUD

date Lg Trader Net Change Weekly
06/11/2013 -63277 -4727
06/18/2013 -63521 -244
06/25/2013 -61644 1877
07/02/2013 -70515 -8871
07/09/2013 -63255 7260
07/16/2013 -70686 -7431



New Zealand Dollar:

nzd

Last Six Weeks of Large Trader Positions: NZD

date Lg Trader Net Change Weekly
06/11/2013 2653 -3360
06/18/2013 2126 -527
06/25/2013 -711 -2837
07/02/2013 -1174 -463
07/09/2013 -1008 166
07/16/2013 -2744 -1736



Mexican Peso:

mxn

Last Six Weeks of Large Trader Positions: MXN

date Lg Trader Net Change Weekly
06/04/2013 82871 -37993
06/18/2013 20949 -42825
06/25/2013 4981 -15968
07/02/2013 2847 -2134
07/09/2013 8035 5188
07/16/2013 11366 3331

The Commitment of Traders report is published every Friday by the Commodity Futures Trading Commission (CFTC) and shows futures positions data that was reported as of the previous Tuesday (3 days behind).

Each currency contract is a quote for that currency directly against the U.S. dollar, a net short amount of contracts means that more speculators are betting that currency to fall against the dollar and a net long position expect that currency to rise versus the dollar.

(The graphs overlay the forex spot closing price of each Tuesday when COT trader positions are reported for each corresponding spot currency pair.)

See more information and explanation on the weekly COT report from the CFTC website.

 

Article by CountingPips.com

 

Fibonacci Forex Trading 101

July 21, 2013 in Forex Strategies

You may be surprised to know that Fibonacci forex trading is the foundation of many forex trading systems that are being used by forex traders all over the world. Many traders have been able to profit quite well using trading techniques rooted in the Fibonacci sequence. Read the rest of this entry →