Weekly COT Report WTI Bulls Continue To Flee Yet Bears Remain Sidelined

As of Tuesday 28^th May:

Large speculators increased net-long exposure to USD by $0.48 billion to $31.3 billion ($35.7 billion against G10 currencies)
Traders were net-short NZD futures at their most bearish level since December 2018
Net-short exposure on GBP was its most bearish since March, although we’ve seen a rise in both long and short bets
Overall, volume changes across FX majors were relatively minor and all below 6k contracts

USD: Over the past four weeks, traders have reduced net-log exposure by -$3.6 billion after being their most bullish since Q4 2015. Over this time we’ve also seen the US dollar index fail to hold above 98, suggesting a temporary top could be in place.

NZD: Large speculators increased gross short exposure to +41,1k contracts, their most bearish level since November 2018. -5.3k long contracts were closed. Total open interest is also rising to show underlying strength in the bearish positioning.

As of Tuesday 28^th May:

Large speculators were their most bearish on silver since September 2018
Traders were their most bearish on Copper since late January
Whilst Platinum remain net-long, a rise of short interest saw traders their least bullish since February
Net-long exposure on WTI fell to its least bullish level since March

Gold: Last week -9.2k long contracts and -7k short contracts closed and the past two reports show a reduction of -25.9k contracts have been closed. Yet gold continues to rally. We noted on Friday that gold bears may have been squeezed near the lows, as the shiny yellow metal has now rallied 2.8% after traders since volumes were reduced. Given the strength of gold’s rally we expect longs have been added again in next week’s report.

Silver: We could be approaching a sentiment extreme on Silver, as traders are not too far from record level of short bets. With data going back to March 1995, there has only been a handful of times that Silver has been net-short, and September 2018 set the record at -29k contracts short. As of last week, traders were net-short by -22.4k contracts.

WTI: Whilst WTI remains under selling pressure, we note that short interest has not risen despite the closure of longs. This continues to point to a correction as opposed to a change in trend. With momentum on WTI pointing glower, we prefer to sell into rallies over the near-term and monitor price action for a potential base to form.

The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

Please note that foreign exchange and other leveraged trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved, seeking independent advice if necessary.

The products and services available to you at FOREX.com will depend on your location and on which of its regulated entities holds your account.

FOREX.com is a trading name of GAIN Global Markets Inc. which is authorized and regulated by the Cayman Islands Monetary Authority under the Securities Investment Business Law of the Cayman Islands (as revised) with License number 25033.

FOREX.com may, from time to time, offer payment processing services with respect to card deposits through StoneX Financial Ltd, Moor House First Floor, 120 London Wall, London, EC2Y 5ET.

GAIN Global Markets Inc. has its principal place of business at 30 Independence Blvd, Suite 300 (3rd floor), Warren, NJ 07059, USA., and is a wholly-owned subsidiary of StoneX Group Inc.