Welcome to the Hedge Fund Telemetry Currency Weekly note! We are excited about this weekly note that will be a good overview of the major currency markets using our charts with DeMark analysis, charts of bullish sentiment, and the weekly Commitment of Traders data. Our subscribers have urged us to launch this stand-alone research product offering for a while. We also launched a Commodity Weekly with a similar analysis. These research weekly reports require a separate subscription, and as a current subscriber to Hedge Fund Telemetry, we have discounted the notes by 50%. These are available “a la carte” for a yearly rate of $500 each however, we are offering them at $250 each. These reports are included in your subscription for “small institutions” and “large institutions” subscribers.
If you would like to sign up now (which would be most appreciated), here is the link to find the offerings. Your discount will apply at checkout. FOR THOSE THAT HAVE ALREADY SIGNED UP THANK YOU
There are also detailed explanations of Commitment of Trader data and a DeMark Sequential primer at the bottom of this note.
Commitment of Traders – The Basics
The Commitments of Traders (CoT) is a weekly report released by the Commodity Futures Trading Commission (CFTC). The CoT report outlines how different traders are positioned in the futures markets. There are two main types of traders in a CoT report: commercials and money managers.
Commercials are the producers and users of a commodity that use the futures markets to hedge. A commercial producer in the corn market could be a farmer who sells corn futures to lock in his selling price. Commercial traders are considered the “smart money” since they are in tune with the physical commodity business and likely have superior supply/demand information. The other main CoT trader type, money managers, comprises hedge funds, mutual funds, and commodity trading advisors. These speculative traders have no interest in the underlying physical commodity business.
CoT data is most meaningful at extremes when either commercial traders or speculators are super net long or net short. The charts below are mostly self-explanatory by looking at the color-coded type of traders. For a more detailed explanation, please see the bottom of this note.
Highlights and themes
The US Dollar strength has continued; however, there is a DeMark Sequential sell Countdown 13 worth watching as well EURUSD is on day 12 of 13. Bitcoin remains with nothing to do.
Currency Sentiment Overview
Currency sentiment highlights
US Dollar Indexes
DXY US Dollar Index daily might be the big news if the DeMark Sequential will reverse after the sell Countdown 13. The trend has been persistent and will take a lot of turn it lower.
Bloomberg US Dollar Index daily does not have a Sequential Countdown on the upside but rather one pending on the downside. This could very well cancel above the TDST and/or completion of Setup 9
US Dollar bullish sentiment remains in the extreme zone over 80%
US Dollar Commitment of Traders
Bitcoin and Ethereum
Bitcoin Daily still nothing to do here
Bitcoin Bullish Sentiment remains under pressure
Ethereum Daily faded after the Aggressive Sequential 13 (amber)
Major USD Crosses
EURUSD Euro / US Dollar could see the buy Countdown 13 this week
Euro bullish sentiment remains under pressure
Euro Commitment of Traders
GBPUSD British Pound Sterling / US Dollar continues lower
British Pound Sterling bullish sentiment is oversold still
British Pound Sterling Commitment of Traders
AUDUSD Australian Dollar / US Dollar
Australian Dollar bullish sentiment remains under pressure
Australian Dollar Commitment of Traders
USDCAD US Dollar / Canadian Dollar
Canadian Dollar bullish sentiment getting oversold
Canadian Dollar Commitment of Traders
USDCHF US Dollar / Swiss Franc
Swiss Franc bullish sentiment continues to fade
Swiss Franc Commitment of Traders
USD / JPY +140 !
Japanese Yen Bullish Sentiment back to the lows
Japnese Yen Commitment of Traders
RISK On Risk Off
This cross is often used as a risk-on / risk-off indicator
EURAUD Euro / Australian Dollar
Three major Yen crosses
EURJPY Euro / Japanese Yen
GBPJPY British Pound Sterling / Japanese Yen
AUDJPY Australian Dollar / Japanese Yen
US Dollar vs Emerging Markets
USDTRY US Dollar / Turkish Lira
USDBRL US Dollar / Brazilian Real
Brazilian Real Commitment of Traders
USDMXN US Dollar / Mexican Peso
Mexican Peso bullish sentiment steady
Mexican Peso Commitment of Traders
USDZAR US Dollar / South African Rand
USDCNH US Dollar / Chinese Offshore Renminbi (Yuan)