COT-based Markets Weekly Overview for May 16–22

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We make up a weekly medium-term trade list based on CFTC reports and technical analysis.

The overview provides a description of the technical condition of the market on the most popular financial instruments, as well as information on the large speculators’ actions according to the last COT reports and the previous period.

If you want to use CFTC reports in your trading practice, you should understand that for an objective assessment of the situation it’s not enough to have the data of the last report. The dynamic is more important, in other words, comparing the statistics of large speculators’ actions in the current period with the previous one, so we mention both values.

Key topics

E-Mini S&P500 (ESM22)

The market remains in the bearish trend and the correction wave develops. A pullback selling opportunity will appear after the correction completion on the Daily timeframe. Short positions will remain relevant until the market is below the nearest resistance level on the Daily timeframe, the highs of May 3–6.

COT indicator increased but didn’t reverse. CFTC reports indicate that large speculators are selling and the professionals’ opinion corresponds to the market technical picture.

E-Mini S&P500 (ESM22). Technical analysis and COT net position indicator

Dollar Index (DXY)

The market remains in the uptrend and the correction wave develops. A pullback buying opportunity will appear after the correction completion on the Daily timeframe. Long positions will remain relevant until the market is above the nearest support level on the Daily timeframe, the lows of May 3–6.

COT indicator increases. CFTC reports indicate that large speculators are buying the dollar, hedgers are selling and the professionals’ opinion corresponds to the Daily trend direction.

Dollar Index (DXY). Technical analysis and COT net position indicator.

Euro (EURUSD)

EURUSD currency pair remains in the bearish trend and the correction wave develops. A pullback selling opportunity will appear after the correction completion on the Daily timeframe. Short positions (EURUSD) will remain relevant until the market is below the nearest resistance level on the Daily timeframe, the highs of May 3–6.

COT indicator increased but didn’t reverse. Large speculators are selling Euro and the professionals’ opinion corresponds to the market technical picture.

EURUSD. Technical analysis and COT net position indicator.

Swiss Franc (USDCHF)

USDCHF currency pair remains in the uptrend and the impulse wave develops. A pullback buying opportunity will appear after the correction formation on the Daily timeframe. Long positions (USDCHF) will remain relevant until the market is above the nearest support level on the Daily timeframe, the lows of May 3–6.

COT indicator decreases. Large speculators are selling franc and the professionals’ opinion corresponds to the market technical picture.

CHFUSD. Technical analysis and COT net position indicator.

British Pound (GBPUSD)

GBPUSD currency pair remains in the bearish trend and the correction wave develops. A pullback selling opportunity will appear after the correction completion on the Daily timeframe. Short positions (GBPUSD) will remain relevant until the market is below the nearest resistance level on the Daily timeframe, the highs of May 3–6.

COT indicator decreases. CFTC reports indicate that large speculators are selling Pound and the professionals’ opinion corresponds to the Daily trend direction.

GBPUSD. Technical analysis and COT net position indicator.

Japanese Yen (USDJPY)

The support level was broken on the Daily timeframe on Thursday, the trend is bearish now and the correction wave develops. A pullback selling opportunity will appear after the correction completion on the Daily timeframe. Short positions (USDJPY) will remain relevant until the market is below the nearest resistance level on the Daily timeframe, the highs of May 5–11.

COT indicator reversed. Large speculators are selling Yen and the professionals’ opinion doesn’t correspond to the Daily trend direction and it makes sense to reduce the position size when an entry point appears in the trend direction.

JPYUSD. Technical analysis and COT net position indicator.

WTI Crude Oil (CLM22)

The support level was broken on the Daily timeframe on Tuesday, the trend is bearish now and the correction wave develops. A pullback selling opportunity will appear after the correction completion on the Daily timeframe. Short positions will remain relevant until the market is below the nearest resistance level on the Daily timeframe, the highs of May 3–9.

COT net position indicator decreased but didn’t reverse. Large speculators are buying oil. Professionals’ opinion doesn’t correspond to the Daily trend direction and it makes sense to reduce the position size when an entry point appears in the trend direction.

WTI Crude Oil (CLM22). Technical analysis and COT net position indicator.

Canadian Dollar (USDCAD)

USDCAD currency pair remains in the uptrend. The correction came to an end last week and the pullback buying opportunity was formed. Long positions (USDCAD) will remain relevant until the market is above the nearest support level on the Daily timeframe, the lows of May 11–12.

COT indicator decreases. CFTC reports indicate that large speculators are selling the Canadian dollar and hedgers are buying and the professionals’ opinion corresponds to the market technical picture.

CADUSD. Technical analysis and COT net position indicator.

Gold (XAUUSD)

The market remains in the bearish trend and the impulse wave develops. A pullback selling opportunity will appear after the correction formation on the Daily timeframe. Short positions will remain relevant until the market is below the nearest resistance level on the Daily timeframe, the highs of May 3–9.

COT indicator decreases. Large speculators are selling gold and the professionals’ opinion corresponds to the market technical picture.

Gold (GCM22). Technical analysis and COT net position indicator.

Silver (XAGUSD)

The market remains in the bearish trend and the correction wave develops. A pullback selling opportunity will appear after the correction completion on the Daily timeframe. Short positions will remain relevant until the market is below the nearest resistance level on the Daily timeframe, the highs of May 3–6.

COT indicator decreases. At the same time, CFTC reports indicate that large speculators are selling and hedgers are buying and the professionals’ opinion corresponds to the market technical picture.

Silver (SIN22). Technical analysis and COT net position indicator.

Australian Dollar (AUDUSD)

AUDUSD currency pair remains in the bearish trend and the correction wave develops. A pullback selling opportunity will appear after the correction completion on the Daily timeframe. Short positions (AUDUSD) will remain relevant until the market is below the nearest resistance level on the Daily timeframe, the highs of May 3–6.

COT net position indicator reversed. Large speculators are selling and hedgers are buying. Professionals’ opinion corresponds to the Daily trend direction.

AUDUSD. Technical analysis and COT net position indicator.

New Zealand Dollar (NZDUSD)

NZDUSD currency pair remains in the bearish trend and the correction wave develops. A pullback selling opportunity will appear after the correction completion on the Daily timeframe. Short positions (NZDUSD) will remain relevant until the market is below the nearest resistance level on the Daily timeframe, the highs of May 3–6.

COT indicator decreases. CFTC reports indicate that large speculators are selling and the professionals’ opinion corresponds to the market technical picture.

NZDUSD. Technical analysis and COT net position indicator.

Russian Rouble (USDRUB)

USDRUB currency pair remains in the downtrend. The correction came to an end last week and the pullback selling opportunity was formed. Short positions (USDRUB) will remain relevant until the market is below the nearest resistance level on the Daily timeframe, the highs of May 6–11.

COT indicator decreases. Large speculators are selling rouble and the professionals’ opinion doesn’t correspond to the Daily trend direction and it makes sense to reduce the position size when an entry point appears in the trend direction.

RUBUSD. Technical analysis and COT net position indicator.

Conclusions

In terms of medium-term trading, financial instruments with the correction close to completion on the Daily timeframe and with potentially the most promising risk-reward ratio are USDRUB and AUDNZD.

In the near future, EURUSD, GBPUSD, USDJPY, AUDUSD and WTI Crude Oil can become noteworthy depending on the market correction depth.

Other financial instruments in the trade list may be also interesting, but in these markets pullback signals on the Daily timeframe are likely to occur no earlier than a week.

More information on the topic:

Good luck in trading!