U.S. Dollar Index

To me, it looks like the last episode of a good tv show. Will the dollar be replaced as a reserve currency? I can’t think in a more naive question/affirmation than this one. When the united states cease to be the world’s military power, maybe… Friends, the case here is another. Looking at what commercials are doing with their dollar positions it’s clear they are already playing the start of a bullish trend, and they are doing it since 04 August. We are in a range since then. It may look a single note song, but big trend changes don’t happen in one single week or month, even more, when it’s about the all might USD Dollar.

The last similar scenario, “coincidentally”, was in 2016 the year of last USA presidential election. The USD Dollar ranged the entire year and just really started to trend after the election results. New president, new economic crew, new squad, new rules… You got the point. Why I am bullish USD Dollar? Positioning talks.

This week I created synthetic cot data for Gold quoted in all majors. Gold was sold against ALL, no exception. This adds another clue about the bottom in USD we are discussing, there’s apparently a risk-on scenario developing.


Don’t be fooled looking only at NET Positions. It was not a true increase in long net positions, what happened was short stop losses triggered. Check the chart, the same amount of longs, and minus 10k on the short side, and the more important here Open interests also reduced by 10k contracts. Nobody is buying here, why would you!?

If the speculator’s traders are about to repeat what they did in 2018 we have more two months of nothing happening, going in tandem with what we discussed above about the USD Dollar.

There’s another scenario. Looking at the XAUEUR Chart we can see, from the positioning perspective, that EUR can get stronger against GOLD, but it really worth nothing that the open interest at these levels of the price is drastically reduced. Any attempt to push EUR higher from here will find huge resistance. There’s also a chatter of 1.2 being a limit level where ECB will intervene, jawboning first.


The great British pound is at a super interesting price and COT Data is giving us clue that a top is forming.  Neutral net position and 22.7% cut in open interest or 18849 contracts, that’s a lot! 😀  I am holding my bearish view, but with no positions yet. Trying to catch the top is what I am going to do now


A very quiet week on COT DATA, the views remain all the same for other assets.


Best regards.

Leo Hermoso


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