FX.co ★ EUR/USD

EURUSD. Greetings everyone. The fresh COT report on euro futures for 8 September has been released, and it requires very careful analysis, because it combines two powerful factors: the rollover of the futures contract and real changes in the positioning of large players. Let's start with open interest. It jumped by 77 052 contracts and reached 942 464. This is a colossal increase, but it should be noted immediately: most of this growth is technical, related to the rollover from the September contract to the December one. The number of traders at the same time decreased to 314, which confirms the technical nature of the movement. Part of the data by participant groups is clearly incomplete, and this is also a sign of a transitional period. Now on the structure. Commercial participants (Commercial) sharply increased both long and short positions. Longs grew by 59 242 contracts, shorts by 43 785. But since the shorts were larger in absolute terms, their net position became short again and amounted to minus 6 730 contracts. This is a bearish signal, but with a caveat regarding the rollover. Large speculators (Non-Commercial), on the contrary, reduced both long and short positions. Longs decreased by 4 968 contracts to 198 509, shorts were reduced by 12 723 contracts to 241 125. Their net short position decreased from 50 371 to 42 616 contracts. That is, speculators continue to cover their shorts, but still remain net short. In the extended report the picture is even more interesting. Dealers and intermediaries practically did not change long and short positions, but sharply increased spreads by 32 300 contracts. Asset managers increased long positions by 16 189 contracts and short positions by 28 764, while reducing spreads by 14 731. Leveraged credit funds reduced both long and short positions, but at the same time sharply increased spreads by 37 235 contracts. This is a classic rollover picture: large players are rolling over via spreads and arbitrage, rather than through pure directional bets. Now let's move on to the levels that currently define the whole picture. The options balance is at 1.15754. The upper boundary of the options range — 1.19329, the lower — 1.14476. The balance of the current futures contract is located in the zone 1.16172-1.16025. The long-term trend balance according to COT data is in the range 1.15379-1.15257. What this means in practice. The price is currently trading around 1.16, that is inside the balance of the current futures contract 1.16172-1.16025. This is the key zone that will determine the nearest direction. If the bulls can hold above 1.16172, the way will open toward the upper boundary of the options range 1.19329. If the price falls below 1.16025, the first target will be the options balance 1.15754, and then the long-term COT balance 1.15379-1.15257. The lower options boundary 1.14476 remains a distant reference in case of a strong bearish move. Comparing this with the COT data, we get the following picture. Speculators are reducing their short positions, which is a bullish signal. Commercials have increased short positions, which is a bearish signal. Dealers and leveraged funds are actively working through spreads, which indicates high uncertainty and preparation for a strong move. Open interest has risen, but a significant part of this increase is a technical rollover. Thus, the market is at an equilibrium point where none of the groups has a clear advantage. The key battle is unfolding around the zone 1.16172-1.16025. As long as the price remains above the options balance 1.15754, the bullish scenario retains a right to exist. If the price settles below that level, pressure on the euro will intensify, and the next targets will be the levels 1.15379-1.15257. The next COT report, when the data settle down after the rollover, will show who actually controls the market. For now we remain in observation mode and closely watch the price reaction at the key levels. Good luck everyone.