FX.co ★ berta.hill | EUR/USD

EURUSD. Greetings everyone. The latest COT report on euro futures for September 8 was released, and it requires very careful analysis because it mixes two powerful factors: a roll 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 must be noted immediately: most of this growth is technical, related to the roll from the September contract to the December contract. The number of traders meanwhile fell to 314, which confirms the technical nature of the move. Some of the participant group data is clearly incomplete, and that is also a sign of a transitional period. Now on structure. Commercial participants (Commercial) sharply increased both long and short positions. Longs rose by 59 242 contracts, shorts by 43 785. But since shorts were larger in absolute terms, their net position again turned short and amounted to minus 6 730 contracts. This is a bearish signal, but with a caveat for the roll. Large speculators (Non-Commercial), on the contrary, reduced both long and short positions. Longs decreased by 4 968 contracts to 198 509, shorts decreased by 12 723 contracts to 241 125. Their net short position shrank from 50 371 to 42 616 contracts. In other words, speculators continue to cover their shorts, but still remain net short. In the expanded report the picture is even more interesting. Dealers and intermediaries practically did not change their long and short positions, but sharply increased spreads by 32 300 contracts. Asset managers increased long positions by 16 189 contracts and shorts 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 roll picture: big players roll via spreads and arbitrage rather than through outright 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 is 1.19329, the lower is 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 determines the near-term direction. If bulls can establish themselves above 1.16172, the road to the upper boundary of the options range 1.19329 will open. If the price falls below 1.16025, the first target will be the options balance at 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 gives the following picture. Speculators are reducing their short positions, which is a bullish signal. Commercials 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 rose, but a significant part of this increase is a technical roll. Thus, the market is at an equilibrium point where none of the groups has a clear advantage. The key battle is around the zone 1.16172-1.16025. As long as the price remains above the options balance 1.15754, the bullish scenario retains its viability. If the price settles below that level, pressure on the euro will increase, and the next targets will be the levels 1.15379-1.15257. The next COT report, when the data settles after the roll, will show who actually controls the market. For now we remain in observation mode and watch the price reaction at the key levels closely. Good luck to everyone.