COT Report Update 10/07/2012 – Market Sentiment View

This weeks COT report (commitment of traders) release from the Commodity Futures Trading Commission (CFTC) was pushed to Monday due to the 4th of July US holiday period.  With this in mind the data is obviously more dated than is typically seen but still worthy of note.

Market participants trading futures cut bearish EUR positions on the Chicago Mercantile exchange as of last Tuesday by 8% on the weekly basis; they registered a net $23 billion 146,177 net short contracts - which is significantly under the recent high point over $33 billion. As is typically seen, the USD had an inverse reaction to the EUR as longs were cut by 13% on the week. In a similar vein the long JPY positions were cut by 8%.  This is reflected in recent USDJPY price action as price consolidates around the 80.00 handle.

Price is currently in a consolidation phase after the major volatility seen over recent months. This could in part be attributed to the slow summer trading that is often seen.