FX.co ★ EUR/USD

EURUSD. Greetings. The latest COT report for euro futures for September 29 has been released, and it shows a continuation of bearish pressure, but with some important nuances. Open interest increased by 32 270 contracts to 853 959. This is a noticeable rise after a sharp drop the previous week. The number of traders increased to 336. That is, the market has started to fill with money again, but this time the increase is not due to small speculators, but due to large players. Now by categories. Large speculators Non-Commercial sharply increased short positions. Longs rose by 17 475 contracts to 238 183, but shorts rose significantly more — by 28 397 contracts to 301 439. Their net short position increased from 52 334 to 63 256 contracts. Speculators continue to build shorts, and the pace is not slowing. Commercial participants Commercial increased both long and short positions, but longs rose more — by 14 268 contracts versus 2 658 shorts. Their net long position rose from 28 967 to 40 577 contracts. Commercials continue to buy the dip, which is a bullish signal. In the expanded report the picture is as follows. Dealers and brokers slightly reduced short positions by 9 948 contracts to 259 712 and slightly decreased longs. Asset managers increased both long and short positions, but longs rose more — by 18 124 contracts versus 14 004 shorts. Leveraged credit funds sharply increased short positions by 23 277 contracts to 164 122 and increased longs by 10 706 to 124 857. Their net short position rose from 25 969 to 39 265 contracts. Now let's compare this with levels. The options balance is at 1.15193. The balance of the current futures contract is located in the 1.14900-1.14763 zone. The balance of the long-term trend of COT data is at 1.15020. The lower boundary of the options range is 1.11771. It's worth noting how close the key levels have converged. The options balance 1.15193, the long-term COT trend balance 1.15020 and the balance of the current futures contract 1.14900-1.14763 form a tight zone around 1.148-1.152. In other words, a dense zone of support has turned into significant resistance. What this means for further prospects. The COT data for September 29 show that speculators and leveraged funds continue to increase short positions. These are bearish signals. Commercials and asset managers are increasing long positions. These are bullish signals. The market remains divided, but the tilt is currently on the side of the bears, since the speculative short is growing faster. Open interest rose, which indicates an inflow of new money. Unlike the previous week, when small traders were leaving the market, large players are now entering the market. This creates prerequisites for a stronger move. The key resistance zone is now located around 1.148-1.152. As long as the price stays below this zone, the bearish scenario remains in force. If the price attempts to return above the 1.148-1.152 zone, these levels will cap the rise. To confirm the bullish scenario, the price needs to settle above the options balance and the balance of the current futures contract. This has not happened yet. Thus, the picture is forming in favor of the bears. Speculators are increasing shorts, leveraged funds are increasing short positions, open interest is rising. Commercials continue to buy the dip, but their support is not yet sufficient for a reversal. The next COT report will show whether the buildup of shorts will continue or whether commercials will be able to turn the situation. For now we remain in observation mode and wait for the price to approach the key targets. Good luck.