Here was last Friday ASCTrend Signal EURUSD.
Sunday, July 20, 2025
Saturday, July 19, 2025
Analysis of Australia Dollar COT Report as of 15 July 2025
Key Observations:
Open Interest & Market Activity
Total Open Interest: 150,487 contracts (↑2,983 from prior week)
Number of Traders: 91
Market Sentiment: Net Short (Institutional & Leveraged Funds dominate short positions)
Positioning Breakdown:
Asset Managers/Institutional (Most Impactful Group)
Long: 39,485 (26.2%)
Short: 77,968 (51.8%) → Strong bearish bias
Net Short: -38,483 contracts (largest influence on AUD downside)
Leveraged Funds (Hedge Funds/Speculators)
Long: 19,728 (13.1%)
Short: 37,336 (24.8%) → Net Short -17,608 contracts
Trend: Increasing shorts (↑2,046 WoW)
Dealer Intermediaries (Market Makers/Banks)
Long: 52,164 (34.7%) (likely hedging or client facilitation)
Short: Only 2,516 (1.7%) → Net Long +49,648 (bullish counterbalance)
Nonreportable Positions (Small Traders)
Long: 24,040 (16.0%)
Short: 21,649 (14.4%) → Slightly net long (retail bias opposite to institutions).
Key Takeaways:
✅ Strong Institutional Selling: Asset Managers hold a massive net short, suggesting bearish AUD expectations (possibly due to RBA rate cuts, weak commodities, or risk-off flows).
✅ Leveraged Funds Aligned: Hedge funds also increased shorts, reinforcing downside momentum.
⚠️ Dealers Net Long: Banks’ large long positions may provide temporary support, but unlikely to reverse trend alone.
🔍 Retail vs. "Smart Money": Small traders are net long, often a contrarian signal (if institutions keep selling, AUD could fall further).
Price Implications:
Short-term (1-4 weeks): AUD remains vulnerable to further declines unless macro conditions shift (e.g., China stimulus, hawkish RBA surprise).
Watch For: A reduction in institutional shorts (covering) as a potential reversal signal.
Tactical Note: Fade rallies while Asset Managers hold extreme net shorts.
Analysis of Japanese Yen COT Report as of 15 July 2025
The Commitments of Traders (COT) Report provides insights into market positioning for the Japanese Yen (JPY) futures on the Chicago Mercantile Exchange (CME). Below is a breakdown of key trends and implications:
1. Open Interest & Market Activity
Open Interest (OI): 321,356 contracts (↑ from prior period, indicating increased market participation).
Total Changes: +412,729 contracts (significant net increase in speculative interest).
Total Traders: 129 (moderate participation).
Implication: Rising open interest alongside price movement suggests strong trend confirmation (bullish or bearish depending on JPY direction).
2. Key Positioning by Trader Category
Dealers (Typically Banks & Market Makers)
Net Short Dominance: 60.0% of OI (192,890 contracts short) vs. only 11.3% long (36,455 contracts).
Change: Dealers increased shorts by +26,952 contracts.
Implication: Dealers are heavily bearish JPY, likely hedging or anticipating JPY weakness.
Asset Managers/Institutional Investors
Net Long Bias: 31.1% of OI (100,056 contracts long) vs. 9.9% short (31,678 contracts).
Change: Increased longs (+12,857) and shorts (+10,510).
Implication: Institutions remain bullish JPY, possibly expecting a reversal or safe-haven demand.
Leveraged Funds (Hedge Funds & CTAs)
Near-Neutral: 13.2% long (42,392 contracts) vs. 14.2% short (45,751 contracts).
Change: Increased shorts (+13,528) while reducing longs (-218).
Implication: Hedge funds are slightly bearish, aligning with dealer sentiment.
Other Reportables & Nonreportables
Other (e.g., Corporates): Strongly long (28.3% of OI).
Nonreportable (Small Speculators): Net long (13.5% vs. 11.2% short).
Implication: Retail and smaller players are bullish JPY, contrasting with dealers.
3. Net Positioning & Market Sentiment
| Category | Net Position | Sentiment |
|---|---|---|
| Dealers | -156,435 (Net Short) | Strongly Bearish JPY |
| Asset Managers | +68,378 (Net Long) | Bullish JPY |
| Leveraged Funds | -3,359 (Net Short) | Mildly Bearish JPY |
| Other | +84,152 (Net Long) | Bullish JPY |
Key Takeaway:
Divergence between dealers (bearish) and asset managers/others (bullish) suggests a battle between institutional hedging and speculative demand.
If JPY is weakening, dealers may dominate short-term trends, but a reversal could occur if asset managers’ long positions grow.
4. Price Implications for JPY (USD/JPY)
Bearish JPY (USD/JPY ↑): Likely if dealer shorts and leveraged fund selling persist.
Bullish JPY (USD/JPY ↓): Possible if asset managers’ longs trigger a short squeeze.
Watch For:
CFTC data shifts in dealer vs. asset manager positioning.
Macro drivers (BoJ policy, risk sentiment, U.S. yields).
Conclusion
The COT report reveals a clash between dealers (short) and asset managers (long), creating potential volatility. Short-term JPY weakness is favored by dominant dealer positioning, but a reversal risk exists if institutional longs intensify.
British Pound COT Report Analysis (15 July 2025)
The Commitments of Traders (COT) report provides insights into market positioning for the British Pound (GBP) futures on the Chicago Mercantile Exchange (CME). Below is a breakdown of key takeaways:
1. Open Interest & Market Activity
Open Interest: 187,275 contracts (↑ 4,287 from prior week)
Total Traders: 116
Indicates moderate liquidity and participation in GBP futures.
2. Key Player Positioning
Dealers (Commercial Hedgers)
Net Short Bias:
Long Positions: 10,620 (5.7% of OI)
Short Positions: 37,878 (20.2% of OI)
Net Short: -27,258 contracts
Typically hedging against currency risk, suggesting expectation of GBP weakness.
Asset Managers / Institutional Investors
Net Short Bias:
Long Positions: 57,625 (30.8% of OI)
Short Positions: 84,786 (45.3% of OI)
Net Short: -27,161 contracts
Large institutions are bearish on GBP, possibly due to economic or political concerns (e.g., UK rate cuts, recession risks).
Leveraged Funds (Hedge Funds, CTAs)
Net Long Bias:
Long Positions: 72,514 (38.7% of OI)
Short Positions: 24,991 (13.3% of OI)
Net Long: +47,523 contracts
Speculative players are bullish on GBP, possibly betting on a rebound or short squeeze.
Other Reportables & Nonreportable Positions
Nonreportable Positions (Small Traders)
Long: 34,471 (18.4% of OI)
Short: 26,181 (14.0% of OI)
Net Long: +8,290 contracts
Retail/small traders are also moderately bullish, but their influence is limited.
3. Market Sentiment & Implications
Bearish Signals:
Dealers & Asset Managers hold significant net short positions, indicating institutional pessimism on GBP.
Bullish Signals:
Leveraged Funds & Retail Traders are net long, suggesting short-term speculative support.
Net Positioning:
The market is divided, but large players (dealers & institutions) dominate sentiment.
Potential Scenarios:
If GBP weakens:
Dealers & Asset Managers will profit, reinforcing downward pressure.
If GBP rebounds:
Leveraged funds may push for a short squeeze, but institutional selling could cap gains.
4. Trading Considerations
Short-term traders: Watch for bullish momentum from leveraged funds, but be cautious of institutional selling.
Long-term investors: Monitor UK economic data & BoE policy, as dealer hedging suggests structural GBP risks.
Analysis of The Euro FX COT Report As of 15 July 2025
Key Observations:
Open Interest & Market Activity
Open Interest (OI): 820,440 contracts (↑174,898 from prior week) – strong increase, suggesting heightened speculative interest.
Total Traders: 307 (↓ from prior week, indicating consolidation among larger players).
Positioning by Trader Category
Dealers (Banks/Market Makers):
Net Short (62.9% of OI) – Significant short exposure (515,996 contracts), likely hedging or betting on EUR weakness.
Asset Managers/Institutional Investors:
Net Long (58.2% of OI) – Bullish stance (477,607 contracts), likely reflecting confidence in EUR strength.
Leveraged Funds (Hedge Funds/CTAs):
Net Long (13.0% vs. 8.3% short) – Moderate bullish bias, but with spread positions adding complexity.
Other Reportables & Nonreportables:
Minor net long positions, suggesting retail/smaller traders are less influential.
Changes vs. Prior Week (Bracketed Numbers)
Asset Managers: Increased longs (+64,484) and reduced shorts (-14,938) – strong bullish shift.
Leveraged Funds: Increased longs (+43,107) but also added to spreads (+44,181) – mixed signals (possibly hedging).
Dealers: Reduced shorts (-96,248), potentially profit-taking or unwinding hedges.
Implications for EUR/USD:
Bullish Bias: Asset managers’ aggressive long buildup contrasts with dealers’ heavy shorts, creating a tug-of-war.
Short-Term Volatility: Leveraged funds’ spread activity may lead to choppy price action.
Key Levels: If Asset Managers’ longs overpower Dealers’ shorts, EUR could rally. Watch for:
Resistance: 1.1500 (psychological level)
Support: 1.1000 (if shorts dominate).
Conclusion:
The COT report shows a divergence between institutional bulls (Asset Managers) and dealer bears, with leveraged funds neutral. The EUR’s direction hinges on whether the bullish momentum from Asset Managers can overcome dealer hedging flows. Monitor price action around key levels for confirmation.
Analysis of the Dollar Index COT Report (15 July 2025)
The Commitments of Traders (COT) Report provides insights into the positioning of different trader groups in the ICE U.S. Dollar Index (DXY) futures market. Here’s a breakdown of key trends:
1. Open Interest & Market Activity
Total Open Interest: 35,177 contracts (↑ 4.61% from prior week)
Indicates increased market participation, possibly due to shifting expectations around Fed policy or macroeconomic trends.
Number of Traders: 126 (suggests concentrated positioning among key players).
2. Key Trader Group Positioning
Dealers (Typically Banks & Market Makers)
Net Long: 9,808 contracts (27.9% of OI)
Change: +408 (bullish increase)
Short Positions: 0 (dealers are not short at all).
Implication: Dealers are aggressively long, suggesting they expect USD strength or are hedging against downside risks.
Asset Managers / Institutional Investors
Net Short: 14,206 contracts (40.4% of OI)
Change: ↓12,748 (reduced short exposure).
Long Positions: 3,143 (↓98).
Implication: Institutions remain bearish on USD, but have covered some shorts, possibly due to profit-taking or reduced conviction in further USD weakness.
Leveraged Funds (Hedge Funds & CTAs)
Net Long: 14,235 contracts (40.5% of OI)
Change: ↑288 (increased bullish bets).
Short Positions: 10,896 (↑1,448).
Implication: Leveraged funds are doubling down on USD strength, possibly anticipating Fed hawkishness or risk-off flows.
Other Reportables & Small Traders
Other Reportables: Net short 2,918 contracts (↓1,928).
Nonreportable Positions (Retail/Small Traders): Net short 3,822 contracts.
Implication: Smaller traders are slightly bearish, but reducing exposure.
3. Net Positioning & Sentiment
| Group | Net Position | Change | Sentiment |
|---|---|---|---|
| Dealers | +9,808 | ↑408 | Bullish (Strong Longs) |
| Asset Managers | -11,063 | ↓12,846 | Bearish (But Covering Shorts) |
| Leveraged Funds | +3,339 | ↑288 | Bullish (Increasing Longs) |
| Others | -1,327 | ↓1,878 | Mildly Bearish |
Overall Sentiment: Mixed but leaning bullish (Dealers & Hedge Funds are long, while Asset Managers are still short but reducing exposure).
4. Key Takeaways & Market Implications
✅ Bullish Signals:
Dealers and leveraged funds are increasing long positions, suggesting institutional confidence in USD strength.
Open interest rising supports growing market interest.
⚠️ Bearish Risks:
Asset managers remain net short, though they are covering positions—could indicate a potential reversal if macro conditions shift.
Non-commercial traders (hedge funds) are extended long, which could lead to profit-taking if USD rallies stall.
🔮 Forward Outlook:
If Fed signals further rate hikes, expect leveraged funds to add more longs, pushing DXY higher.
If risk sentiment improves (e.g., equities rally), asset managers may increase shorts again, pressuring USD.
5. Trading Strategy Considerations
Short-term (Bullish): Follow leveraged funds’ lead if USD breaks key resistance.
Medium-term (Caution): Watch for asset manager short-covering exhaustion or renewed bearish bets.
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