CFTC COT DOLLAR INDEX
Hello, big Boyz! I hope you all had a great weekend! Time to talk about the king: CFTC COT Dollar. We are already inside a bullish cycle that started on August 18 and it will last until Feb 09, 2021 ( this can change). Now if you open your COT Tool, you will realize that being short U.S. Dollars is not a common trade and when non-commercials change the bias to bullish they do it at an incredible speed. This does not mean the range cannot last 2 or 3 more weeks. We have intel, based on the Half-Life Projection tool inside your dashboard, that this is the expected time that EURUSD bullish cycle will be completed.
Since the CFTC COT U.S. Dollar bullish cycle started non-commercials are closing shorts, week after week. This gives us the confidence to keep trying peak tops/bottom on dollar crosses.
eurusd – EURO DOLLAR
EURUSD still doing the textbook top formation we discussed last week. The expected end of the bullish cycle is the start of October. So the approach remains the same, we are in “trying to catch the top” mode. Just don’t be a fool thinking even with tons of intelligence we have markets can not slap our face. This is Forex, a super ever-changing-landscape. So keep the stops. The expected September high is 1.21010.
GBPUSD – POUND DOLLAR
The British pound mood is oscillating. Still looking a bullish trend to me, but we need to see Open Interest increasing in the following weeks, otherwise, this is just a dead cat bounce. Another thing bothering me is the fact commercials Open Interest gave a jump. This is very similar to selling climax signals triggered by the cot index, this is anything, but bullish.
USDCAD – CANADIAN DOLLAR
We got move! Longs were massively cut while shorts were added. It walks and talks like a bear, but I prefer to play the bullish move. The main reason for this is Canada is not doing better than the USA Economy. This is super clear when you look at The Fundamental Score. It was a big move to the downside, but it’s no extreme. 1.31270 is the expected low to September and we have a strong weekly demand zone that ranges from 1.29500-1.30005. I still prefer trying to catch the bottom.
USDJPY – DOLLAR YEN
The Japanese yen is also doing the dollar recovery trade. This week non-commercials cut shorts, added longs, and increased open interest. This is a bottom pattern formation. Another one that I will try to catch the bottom.2