Matt Simpson, CFTe, MSTA
CityIndex
A new weekly column where we will study points of interest on Futures volume and CFTC data.
Australian Dollar Futures
The Rikshaw Man Doji is of particular interest because the Futures Charts (left) shows this was on increasing volume to suggest a 'change in hands' from buyers to sellers. Additionally the CFTC data (right) shows that the ratio between Net Longs and Shorts has reduced whilst Open Interest has also increased, to also suggest sellers are coming into the market.
Whilst volatility remains low it would be wise to not become too 'sensationalist', but it does raise more confidence that we are witnessing a topping pattern forming on the weekly timeframe. Whilst volatility remains low on D1 then it is still wise to not become too attached to positions and not outstay your welcome whilst the [suspected] topping pattern continues to form.
Canadian Dollar Futures
A slightly mixed picture here; Whilst I am satisfied we have seen a sentiment extreme on Canadian Dollar futures after a rejection of 0.94 resistance, we can see that Large Traders have added to their Net Longs and Friday's decline was seen on slightly lower volumes. USDCAD however did close above 1.081 resistance and provides extra confidence that the June low was a multi-month low, but the data here does leave room for some retracements before the movement continues.
British Pound Futures
A reduction of Net Longs on CFTS data along with an increase of bearish volumes on the Futures last week does leave room for further losses this week for GBP pairs. Open interest however also saw a reduction so I still suspect that current losses are corrective and GBP will resume its bullish structure soon enough.
US Dollar Futures
A slight increase in Net Longs on rising Open interest accompanied the break to a 24-week high for the Greenback. Futures volume last week also positive to paint a more bullish picture for the near-term. Friday’s bullish close (not pictures) was seen on lower volumes which leaves room for retracements early this week. Overall the Greenback continues to paint a more bullish picture going forward.
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