Technical Analysis of FX and Commodity Markets

The article analyzes market positioning from the COT report and discusses potential reversals in EUR/USD, commodity FX, and metals futures.

EUR/USD

The article suggests that EUR/USD may be nearing an inflection point, with a decline in EUR/USD slowing and net-short exposure among large speculators fading. This divergence indicates potential exhaustion in bearish sentiment and could lead to profit-taking and a rally in EUR/USD.

Commodity FX

Commodity FX, such as AUD/USD, NZD/USD, and CAD/USD, have been under pressure due to the strength of the US dollar. However, there are signs of exhaustion in the bearish moves, with increasing net-long exposure among managed funds and a reduction in net-short exposure among large speculators. These divergences could indicate a potential reversal in commodity FX.

Metals

Key metals such as gold, silver, and copper have seen increased net-long exposure among large speculators. However, the article warns that this may be a temporary move and that traders should remain nimble in these markets.

WTI Crude Oil

WTI crude oil futures have continued to surge, with large speculators and managed funds increasing net-long exposure. The strong US economy and stimulus from China have supported the move. However, the article cautions that the market is approaching a near-term sentiment extreme and that prices remain below previous highs.

Overall, the article provides a comprehensive overview of technical analysis in FX and commodity markets, highlighting potential reversals and areas of caution.